Norway’s sovereign wealth fund, a major Tesla shareholder, announced its intention to vote against Elon Musk’s controversial $56 billion pay package from 2018, as shareholders prepare to revisit the issue this week.
The fund, managed by Norges Bank Investment Management (NBIM) and valued at $1.7 trillion, holds approximately 0.98% of Tesla’s stock, worth $7.7 billion. NBIM expressed concerns over the size of Musk’s pay package, citing worries about dilution, performance triggers, and the lack of mitigation of a key person risk.
“Elon Musk has not been paid for any of his work for Tesla for the past six years… That strikes us, and the many stockholders from whom we already have heard, as fundamentally unfair,” said Robyn Denholm, Tesla’s Chairperson, in a letter included in the company’s recent filing seeking approval for Musk’s 2018 pay package.
In April 2024, Tesla filed paperwork for shareholders to approve Musk’s 2018 pay package again, following a Delaware Court’s ruling that voided the original agreement. The court’s decision was based on the package’s structure, which included a maximum value of $56.8 billion and a $2.6 billion grant date fair value, contingent on Musk meeting specific goals.
Despite opposition, billionaire investor Ron Baron voiced his support for honoring Musk’s pay package, highlighting Tesla’s market growth from $53 billion to a peak of a trillion, currently valued at $550 billion.
“When the contract was signed, [Tesla’s] market value was $53 billion. It got as high as a trillion, and it’s now $550 billion. I think in the next ten years, we’ll make 4-5 times our money again in Tesla,” Baron said.
