The Norwegian Sovereign Wealth Fund, the world’s largest, has announced it will vote against ratifying Elon Musk’s proposed compensation package, which is estimated at $1 trillion.
The fund, which is considered as one of the biggest national wealth funds in the world, clarified that while it acknowledged the significant value created under Musk’s strategic thinking, it would still vote against his compensation award.
The recent warning comes from Norges Bank, which is the seventh-largest shareholder in Tesla with a stake worth $17bn, two days before the carmaker holds an annual shareholder meeting.
Concerning the situation, investors will vote on proposals for an exceptional incentive program that could make Elon Musk the world’s first trillionaire.
Meanwhile, Musk will be able to receive new shares that will increase his stake in the company from nearly 16% to 25% if he increases the value of Tesla from about $1n to $8.5tn over the next 10 years.
In a written letter to shareholders, Tesla chair Robyn Denholm proclaimed that the vote is crucial to retain the businessman as chief executive of the company, warning that the company would lose significant value if he were to leave officially.
On the other hand, Tesla’s biggest single shareholder can opt for voting on the proposal as well.
Nevertheless, the recent Norwegian funds’ opposition demonstrated a structural rejection of the pay deal and significantly increased the risk that the compensation package will fail the shareholder re-voting.
