One of Tesla’s largest shareholders has officially voted against Elon Musk’s massive new pay package, marking a significant blow to the world’s most valuable automaker ahead of its pivotal shareholder meeting.
Norway’s sovereign wealth fund, Norges Bank Investment Management (NBIM), which manages roughly $1.9 trillion in assets, said it rejected Musk’s $1 trillion compensation proposal. The fund controls about 1.2% of Tesla’s shares, making it the sixth-largest institutional investor in the company.
In a statement, the fund said:
“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.”
What’s at Stake for Musk and Tesla
The vote centers on an incentive plan that could grant Musk an additional 12% stake in Tesla if he drives the company to an $8.5 trillion valuation within the next decade—nearly eight times its current market cap. If that target is met, Musk’s reward would be worth just over $1 trillion.
To unlock the full award, Musk must achieve a series of ambitious milestones, including delivering 20 million vehicles per year, deploying one million autonomous robotaxis, and securing 10 million active subscribers to Tesla’s Full Self-Driving (FSD) software over a three-month average period.
Investors are divided. Supporters argue that Musk’s vision and leadership are central to Tesla’s global dominance in electric vehicles and artificial intelligence. Critics say the package is excessively large, overly dilutive to shareholders, and fails to address what they call “key person risk” — the company’s heavy dependence on Musk.
Tesla shares fell nearly 3% in premarket trading Tuesday following the fund’s disclosure, reflecting investor anxiety over the growing opposition.
Wider Opposition to Musk’s Compensation
NBIM is the first major institutional investor to publicly confirm its vote. But it’s not alone.
Several smaller pension funds, including the American Federation of Teachers and New York City retirement systems, have announced they too oppose the package. Influential proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have also urged shareholders to reject the plan, citing concerns about its size and structure.
Musk, who owns roughly 15% of Tesla’s stock and remains its largest shareholder, has the power to significantly influence the outcome. Still, growing dissent from major funds could weaken the optics of shareholder confidence, even if the proposal narrowly passes.
Upcoming Shareholder Meeting Looms Large
Tesla’s annual meeting on Thursday will reveal the final vote tallies not only on Musk’s pay package but also on board re-elections and a proposal urging Tesla to invest in Musk’s AI venture, xAI.
The event is expected to draw intense global attention. Investors are watching to see whether shareholders will reinforce Musk’s leadership or signal a shift toward greater corporate governance oversight.
A Battle Years in the Making
This isn’t Musk’s first fight over compensation. The same Norwegian fund opposed Tesla’s 2018 pay plan, which a Delaware court later voided in January, calling it “an unfathomable sum.”
Tesla’s board subsequently reintroduced a revised version, arguing that Musk’s leadership had created trillions in shareholder value since 2018. The plan passed with 72% support, but the Delaware judge refused to reinstate it. Tesla has appealed, and a decision from the Delaware Supreme Court is pending.
Investor Takeaway
The conflict over Musk’s $1 trillion package underscores a broader debate across corporate America: how much is too much for visionary CEOs?
While Tesla’s board insists the payout is performance-based, critics say it sets a dangerous precedent for executive pay tied to sky-high valuations that may not materialize.
For investors, the outcome will help determine whether Tesla remains an innovation-driven growth story—or risks becoming a governance flashpoint. A rejection could pressure Tesla to rework Musk’s incentives, while approval would reaffirm his near-complete control over the company’s future.
Either way, the vote will shape Tesla’s trajectory for years to come, influencing how both Wall Street and Main Street evaluate leadership risk and long-term shareholder value in one of the world’s most watched companies.
About Author
