UPDATE: In a stunning move, Norway’s sovereign wealth fund has just voted against Elon Musk’s proposed $1 trillion pay package, intensifying the already heated debate surrounding executive compensation in the tech world.
The Norges Bank Investment Management, which oversees a staggering $2 trillion fund, announced its decision on Tuesday, just days ahead of Tesla’s annual shareholder meeting scheduled for Thursday. This decision marks a significant setback for Musk, whose compensation plan hinges on achieving ambitious performance targets.
While the bank acknowledged the “significant value” generated under Musk’s leadership, it expressed serious concerns about the enormity of the pay package and potential dilution of shareholder value. The fund, Tesla’s sixth-largest institutional investor with a 1.2% stake, previously voted against Musk’s pay package in 2024.
In a revealing twist, leaked text messages from January showed a tense exchange between Musk and Nicolai Tangen, CEO of Norges Bank, where Musk emphasized the importance of friendship in business, stating, “friends are as friends do.”
The $1 trillion compensation plan is designed to reward Musk for hitting a series of ambitious goals over the next decade, including increasing Tesla’s market capitalization to $8.5 trillion, selling 1 million Optimus robots, and significantly boosting annual earnings beyond those of tech giants like Meta and Google.
This announcement adds fuel to an ongoing fire, as other major investors, including the California Public Employees Retirement System (CalPERS) and the New York State Retirement Fund, have also voiced opposition to Musk’s compensation strategy. Proxy advisory firms Glass Lewis and ISS have urged shareholders to reject the plan, leading Musk to label them as “corporate terrorists” during a recent earnings call.
Despite the pushback from Norges Bank and other investors, several prominent shareholders, such as Florida’s State Board of Administration and ARK Invest’s Cathy Wood, have indicated their support for Musk’s pay package. However, major stakeholders like Vanguard and BlackRock, Tesla’s two largest investors, have yet to disclose their voting intentions.
This critical vote on Musk’s pay will occur during Tesla’s annual meeting on Thursday, and the outcome could reshape the dynamics of executive compensation across the industry. As the clock ticks down, all eyes are on the shareholders, with significant implications for Tesla’s leadership and future direction.
Tesla has not yet responded to inquiries regarding this unfolding situation. Stay tuned as we bring you the latest updates on this developing story.