Norway’s Wealth Fund Opposes Elon Musk’s $1 Trillion Tesla Pay Package

Last year, the Norwegian fund voted against the Elon Musk’s package, which would have been the largest paycheck in US company history.

Norway’s sovereign wealth fund has announced it will vote against paying a compensation package to Tesla Chief Executive Elon Musk, proposed at $1 trillion (£765 billion).

The wealth fund stated that while it appreciated the value that Tesla gets from Musk’s visionary leadership, it would be voting against him receiving a performance award. They are concerned about the risks that come with relying so much on a single person. The fund also stated that it wants to maintain a constructive dialogue with Tesla on executive pay and other matters.

The warning announcement from Norges Bank, the seventh-largest single shareholder in Tesla with a stake of $17 billion, comes just two days before the carmaker’s annual shareholder meeting. At the meeting on Thursday, investors will vote on a proposal to pay a record-breaking salary to Musk, which could make him the first trillionaire in the world.

If Elon successfully increases Tesla’s value from around $1 trillion to $8.5 trillion over the next decade, he will receive new shares that will increase his ownership in the company from around 16% to more than 25%. That would potentially increase his personal fortune to more than $2 trillion.

Tesla chair Robyn Denholm has argued his vote for approving the package is importany for Elon Musk as his vote can retain him as CEO of the company, warning while writing to the shareholdes of the company that the company will reduce in value if he were to depart.

Last year, the Norwegian fund also voted against the package, which would have been the largest paycheck in US company history, at $56 billion for Musk. The proposal was approved by the shareholders in June, but it was later rejected for a second time by a Delaware court.

The Norwegian fund CEO, Nicolai Tangen, invited Musk and other leaders to a dinner in Oslo last year. But Musk declined the invite after the fund voted against his pay proposal. A text exchange between Tangen and Musk was later revealed through a freedom of information request by a Norwegian business publication, which showed that Musk told Tangen that favors should be reciprocated, suggesting some strain in their relationship.

Among the shareholders, there is a division about the new deal, although influential advisory companies such as Glass Lewis and ISS have both recommended that investors reject the $1 trillion plan. Some major pension funds, such as the American Federation of Teachers and the California Public Employees’ Retirement System, the largest public pension scheme in the US, have also voiced opposition to the proposal.

As Tesla’s largest individual shareholder, Musk is eligible to vote on the package. Last month, he posted on X (formerly Twitter) that Tesla is worth more than all other automakers combined, and questioned who else could lead the company, implying he might step down if the package is rejected.

Tesla is working to retain Musk as CEO, with global deliveries dropping 13% in the first half of the year, partly due to the redesign of the Model Y. The company saw a 7% increase in deliveries in its most recent quarter, as American consumers rushed to buy cars before federal tax incentives expired. With those credits now ended, Tesla faces potential challenges in its key market.

Sales have also fallen sharply in much of Europe: new registrations in October dropped 89% in Sweden, 86% in Denmark, 50% in Norway, and 48% in the Netherlands. France was a rare exception, with modest sales growth for the second consecutive month.

Meanwhile, figures from the Chinese Passenger Car Association showed that shipments from Tesla’s Shanghai factory fell to 61,497 units in October, about 10% lower than the previous year.