Norway’s sovereign wealth fund — one of Tesla’s largest investors — announced Tuesday it will vote against a proposed compensation package that could grant CEO Elon Musk up to $1 trillion over the next decade.
According to The Associated Press, more than a dozen company proposals are set for a vote during Tesla’s annual shareholder meeting on Thursday, but none have sparked more controversy than Musk’s potential payout.
“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,” said Norges Bank Investment Management, which oversees the country’s Government Pension Fund Global. “We will continue to seek constructive dialogue with Tesla on this and other topics.”
The Norwegian fund holds a 1.16% stake in Tesla, making it the sixth-largest institutional investor.
Meanwhile, Baron Capital Management — which owns roughly 0.4% of Tesla’s outstanding shares — announced Monday that it will back the package.
“Elon is the ultimate ‘key man’ of key man risk. Without his relentless drive and uncompromising standards, there would be no Tesla,” said firm founder Ron Baron. “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.”
Tesla’s management has proposed granting Musk up to 12% of the company’s shares through 12 separate tranches if Tesla meets a series of aggressive milestones, including major increases in car production, share price, and operating profit.
