Norway sovereign wealth fund rejects Elon Musk’s $1 trillion pay deal

Norway’s $2 trillion sovereign wealth fund said it will vote against Elon Musk’s trillion-dollar pay package at Tesla‘s annual shareholder meeting this week, rebelling against management guidance and threats from Musk to step down if the deal is rejected.

Norges Bank Investment Management (NBIM), which manages the fund — the largest of its kind in the world, and a major shareholder in Tesla — said on Tuesday that it had already cast its vote against Musk’s remuneration package as CEO of the carmaker.

“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,” NBIM said in a statement.

“We will continue to seek constructive dialogue with Tesla on this and other topics,” the fund’s managers added.

Norway’s wealth fund holds a 1.14% stake in Tesla, according to its half-year filings in June. The value of that investment was last declared to be 118.3 billion Norwegian kroner ($11.6 billion).

Tesla shares were 2.5% lower in premarket trade.

Tesla’s Board of Directors is asking shareholders to approve a pay plan for Musk that could see him granted almost $1 trillion in stock and expand his voting powers at the company. The full award would be contingent on Tesla hitting certain milestones over the next 10 years.

The proposals have raised eyebrows and been met with opposition from some company watchers. Last month, the Take Back Tesla campaign — a coalition of unions and corporate watchdogs — urged shareholders to reject the deal, while proxy advisories Institutional Shareholder Services and Glass Lewis have also recommended investors vote against the compensation package.

Musk has hit back at those recommendations, labeling ISS and Glass Lewis “corporate terrorists” on an analyst call.

“Tesla is worth more than all other automotive companies combined,” Musk wrote in a post on X last month in response to a critic of the pay proposal. “Which of those CEOs would you like to run Tesla? It won’t be me.”

Representatives for Musk and Tesla were not immediately available to comment on NBIM’s vote against the proposed CEO compensation package.

However, Musk has butted heads with NBIM over his pay in the past.

Last year, NBIM voted against reinstating Musk’s $56 billion pay deal after it was rescinded by a U.S. judge. The package — the largest public executive compensation plan in U.S. history — was ultimately approved by Tesla’s shareholders.

Following the vote, the Financial Times and Norwegian newspaper E24 published text messages exchanged between Musk and NBIM Chief Executive Nicolai Tangen, which showed the Tesla CEO declining an invitation to a dinner in Norwegian capital Oslo.

“When I ask you for a favor, which I very rarely do, and you decline, then you should not ask me for one untul you’ve done something to make amends,” Musk reportedly wrote. “Friends are as friends do.”

Musk is the world’s wealthiest person, according to Forbes, with a net worth of $504.1 billion.

— CNBC’s Lora Kolodny contributed to this report.