Norwegian sovereign wealth fund, a key shareholder in Tesla, has announced it will vote against Tesla’s proposed $1 trillion pay package for CEO Elon Musk. The decision was made by Norges Bank Investment Management (NBIM), which manages Norway’s $1.6 trillion oil fund. The fund said the plan is too large, too risky, and not in the best interests of shareholders, even though it acknowledges Musk’s major contribution to Tesla’s success. The vote will take place at the EV giant’s upcoming annual shareholder meeting, where investors will decide whether to approve what would be the biggest executive pay deal ever proposed.
Notably, the new pay plan would give Musk the chance to earn as much as $1 trillion in stock-based rewards over the next decade if Tesla meets a series of extremely ambitious performance goals. These include reaching a market value of about $8.5 trillion, as well as hitting high revenue and profit targets. The deal would come in the form of stock options that Musk can claim only if those goals are met, meaning he would receive nothing if the company falls short. The company’s board argues the plan is designed to keep Musk motivated and committed to Tesla, while linking his compensation directly to the company’s long-term success.
However, NBIM has made it clear that it does not support the proposal. In its statement, the fund said it is concerned about the size of the potential payout and the dilution effect it could have on other shareholders, since issuing new shares to Musk would reduce the ownership stake of existing investors. The fund also pointed out what it called a ‘key person risk’, which means Tesla depends heavily on Musk’s leadership, and there is little in the company’s governance to reduce that dependence. NBIM said that while Musk has created huge value for the firm over the years, such a massive pay deal goes beyond what it considers reasonable and responsible corporate practice.
Although NBIM owns only about 1.1% of Tesla’s shares, its view carries symbolic weight because it is one of the world’s most influential institutional investors. It is also worth noting that this is not the first time Norway’s wealth fund has opposed a major pay plan for Musk. In 2018, the fund also voted against his earlier $56 billion compensation package, which went on to become one of the most controversial executive pay deals in corporate history. Although shareholders initially approved that plan, it was later struck down by a Delaware court in early 2024, which ruled that the award had been ‘unfair to shareholders’ and was not properly approved by Tesla’s board. Meanwhile, the beginning of this year has not been easy for the company, as it reported its weakest results since 2022 in the first quarter (Q1 2025), with profits dropping by 71% and revenue falling to $19.3 billion.
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