Norway’s Mega Fund Rejects Musk’s Record-Breaking Tesla Pay Deal
Norway’s $1.6 trillion sovereign wealth fund, the world’s largest, will vote against Elon Musk’s $56 billion Tesla pay package at the upcoming shareholder meeting. The move by Norges Bank Investment Management (NBIM)—a top Tesla investor with a 0.98% stake—signals growing institutional pushback against excessive CEO compensation and weak corporate oversight.
Why Musk’s Pay Package Is Under Fire
Musk’s 2018 compensation plan, now worth ~$1 trillion based on Tesla’s stock surge, is the largest in corporate history. The all-stock deal granted him 12 tranches of options if Tesla hit aggressive revenue and market cap goals—which it did by 2021. But critics argue:
– Size: The payout dwarfs CEO pay at peers like Apple or Microsoft.
– Governance: Tesla’s board lacks independence, with multiple directors tied to Musk.
– Shareholder Impact: Option exercises could dilute stock value by ~8%.
Norway’s Stance: A Call for Accountability
NBIM, known for its ESG (Environmental, Social, Governance) focus, stated:
“While Musk delivered immense value, the award’s scale, performance triggers, and weak board oversight are unacceptable.”
The fund also flagged conflicts of interest, noting Tesla directors’ personal/financial ties to Musk.
Investor Rebellion Gains Momentum
Norway joins major opponents:
– Proxy Advisors: Glass Lewis and ISS advised voting “no.”
– CalSTRS: Called the package “out of sync with modern governance.”
– Retail vs. Institutions: Musk’s fanbase may back the deal, but institutional votes could tip the scale.
Tesla’s Defense: “Pay for Performance”
Tesla’s board argues the package was critical to Musk achieving “impossible” growth, with shares rising ~10x since 2018. They warn rejecting it could demotivate Musk, risking Tesla’s future innovation.
June 13 Vote: What’s at Stake?
- If approved: Musk secures his historic payout.
- If rejected: Tesla may renegotiate terms, potentially triggering board reforms or Musk stepping back.
Bigger Picture: A Test for Corporate Governance
The showdown reflects a shift toward stricter executive pay scrutiny, especially in tech. Norway’s move could inspire more investors to demand accountability from high-profile CEOs.
