The “total size” of Elon Musk’s proposed $1 trillion pay package has become the central point of contention, leading Norway’s sovereign wealth fund to reject it.
The fund, which holds a $17 billion stake in Tesla, stated it appreciated the “significant value” Musk has created. However, it said it was “concerned about the total size of the award,” a sentiment shared by many other institutional investors.
This “no” vote is a major blow from the company’s seventh-largest shareholder. The fund also cited “dilution” and “key person risk” as part of its “consistent” view on executive compensation.
The fund’s opposition is a repeat of its vote against Musk’s $56 billion package last year. That deal, though approved by shareholders, was ultimately voided by a Delaware court, leading to this new, even larger proposal.
Tesla’s board argues the “total size” is justified to retain the 54-year-old CEO, but advisory firms Glass Lewis and ISS agree with the Norwegian fund that the price tag is too high.