Elon Musk pay package showdown: Norway wealth fund says no to record deal; $1 trillion plan tests shareholder loyalty
The announcement comes ahead of Tesla’s annual shareholder meeting on Thursday, where the plan has become the most divisive agenda item among investors, AP reported.The fund, managed by Norges Bank Investment Management (NBIM), holds about 1.16% of Tesla’s shares, making it the sixth-largest institutional shareholder.
In a statement, NBIM said while it recognises the “significant value created under Mr.
Musk’s visionary role,” it remains concerned about “the total size of the award, dilution, and lack of mitigation of key person risk consistent with our views on executive compensation.”“We will continue to seek constructive dialogue with Tesla on this and other topics,” the fund added.Tesla’s proposal involves awarding Musk shares equivalent to nearly 12% of the company in 12 separate tranches, contingent upon achieving ambitious performance goals tied to production, operating profit, and stock price milestones.
If fully realised, the package could make Musk’s payout one of the largest in corporate history.However, not all major investors are opposed.
Baron Capital Management, which holds about 0.4% of Tesla’s outstanding shares, announced support for the plan.“Elon is the ultimate ‘key man’ of key man risk.
Without his relentless drive and uncompromising standards, there would be no Tesla,” said Ron Baron, founder of Baron Capital.
“He has built one of the most important companies in the world.
He’s redefining transportation, energy and humanoid robotics and creating lasting value for shareholders while doing it.
His interests are completely aligned with investors.”Musk remains Tesla’s largest individual shareholder, holding 15.79% of all outstanding shares.The shareholder vote will determine whether investors endorse Tesla’s management proposal, which has drawn both strong backing and fierce criticism.
The outcome will also signal how much confidence shareholders retain in Musk’s leadership amid questions over governance, compensation practices, and the company’s long-term strategy.
