Norway’s $1.7 trillion sovereign wealth fund, Norges Bank Investment Management (NBIM), has announced its decision to vote against ratifying Tesla CEO Elon Musk’s controversial $56 billion pay package. The fund is Tesla’s eighth-largest shareholder, with a 0.98% stake worth approximately $7.7 billion. This move follows a Delaware judge’s decision earlier this year invalidating the pay package, deeming it unfair to shareholders and calling it an ‘unfathomable sum.’ NBIM has expressed appreciation for Musk’s leadership and the value he has generated for Tesla since the grant date in 2018. However, the fund remains concerned about the overall size of the award, its performance-based structure, potential dilution, and the lack of mitigation for key person risk. In 2018, NBIM also voted against the pay package. The fund emphasized its commitment to seeking constructive dialogue with Tesla on this and other issues. This announcement highlights the fund’s ongoing scrutiny of excessive CEO compensation. Last year, it voted against more than half of U.S. pay packages exceeding $20 million, citing concerns about their alignment with long-term value creation for shareholders.
