The world’s largest wealth fund announced on Saturday that it will vote against Elon Musk’s $56 billion pay award at Tesla. This decision was made by Norway’s $1.7 trillion sovereign wealth fund, which is the eighth-largest shareholder in Tesla with a .98% stake valued at $7.7 billion. They cited concerns over the size of Musk’s compensation, which is currently the largest pay package in corporate America.
While acknowledging the significant value created under Musk’s leadership since the grant date in 2018, Norges Bank Investment Management expressed concerns about the total size of the award, its structure, performance triggers, dilution, and the lack of mitigation of key person risk. The operator of the fund, led by CEO Nicolai Tangen, stated their thoughts on their website.
Shareholders of Tesla are set to vote on the CEO’s pay package at the company’s annual meeting on Thursday. This package, which had previously been voided by a judge, will require ratification from shareholders along with the reincorporation of Tesla in Texas, its home state.
A Delaware judge previously ruled on a lawsuit in January brought by a shareholder to void the large pay package approved in 2018. The judge described Musk’s salary as an “unfathomable sum” and stated that it could be voided. In July of last year, Tesla’s directors agreed to return $735 million to the company to resolve shareholder claims of overpayment from a separate lawsuit filed in 2020.