Norway's Sovereign Wealth Fund to Reject Elon Musk's Pay Package
Norway's sovereign wealth fund announced it will vote against the nearly $1 trillion compensation package proposed for Tesla CEO Elon Musk at this week's annual shareholder meeting.
Details of the Compensation Plan
Musk, whose net worth exceeds $400 billion, was set to receive a performance award valued at about $900 billion along with 432 million additional Tesla shares, giving him roughly a 25% ownership stake. If approved, this plan would make him the first person in the world to reach a trillionaire status, according to The Guardian.
Position of Norges Bank Investment Management
The fund, which is the world's largest sovereign wealth fund and Tesla's seventh largest shareholder with a 1.14% stake, expressed concerns about the compensation.
"While we appreciate the significant value created under Mr. Musk's visionary role, we are concerned about the total size of the award, dilution and lack of mitigation of key person risk -- consistent with our views on executive compensation."
The fund stated it will maintain a constructive dialogue with Tesla on this and other matters.
Concerns from Tesla's Leadership
Robyn Denholm, Tesla’s board chairwoman, warned last week that the company risks losing Musk as CEO if shareholders reject the pay package.
Summary
This move by Norway's sovereign wealth fund highlights growing caution over exceptionally large executive compensations and their impact on shareholder value.
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