Norway's $2 trillion sovereign wealth fund just delivered a massive blow to Elon Musk, voting against his nearly $1 trillion Tesla compensation package ahead of this week's shareholder meeting. The rejection from one of Tesla's major institutional investors highlights growing concerns about executive pay excess and could signal trouble for the proposal's approval.
Norway's sovereign wealth fund just threw down the gauntlet against corporate America's biggest pay package ever. Norges Bank Investment Management (NBIM), which oversees the world's $2 trillion oil fund, announced Tuesday it's voting against Elon Musk's staggering compensation deal at Tesla - a package that could be worth nearly $1 trillion if the electric vehicle maker hits ambitious targets over the next decade.
The fund's rebellion comes at a critical moment. Tesla shareholders are set to vote this week on the pay proposal, and Musk has already made his stance crystal clear: approve the package or he walks. "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," NBIM said in a carefully worded statement that reads like diplomatic corporate speak for 'this is absolutely insane.'
The market's reaction was swift and brutal. Tesla shares tumbled 2.4% in premarket trading as investors digested what this rejection might mean for the broader shareholder vote. Norway's fund isn't just any investor - it's one of Tesla's largest institutional shareholders and carries serious weight in corporate governance battles.
This isn't Norway's first rodeo with executive compensation drama. The fund has consistently pushed back against what it sees as excessive CEO pay across its massive portfolio, which spans thousands of companies worldwide. According to previous NBIM reports, the fund has voted against executive compensation proposals at roughly 20% of the companies where it holds stakes, citing concerns about pay-for-performance alignment and shareholder dilution.
The timing couldn't be more awkward for Tesla's board. They're asking shareholders to effectively hand Musk stock grants that would dwarf any executive compensation package in corporate history - even bigger than the controversial $56 billion package that Delaware courts struck down earlier this year. The new proposal would grant Musk additional Tesla shares contingent on the company hitting specific performance milestones, potentially expanding his voting control and further cementing his grip on the company he's transformed from startup to automotive giant.
