Norway’s sovereign wealth fund announced on Tuesday that it will vote against Tesla Inc (NASDAQ:TSLA) CEO Elon Musk’s proposed compensation package at the company’s annual shareholder meeting on November 6.
The package is contingent on Tesla achieving ambitious milestones over the next decade, including growing the company’s market value to $8.5 trillion.
While the fund acknowledged Musk’s role in creating significant value at Tesla, it raised concerns over the sheer size of the compensation, potential dilution of shares, and insufficient protections against the risks posed by Musk’s central role in the company.
The fund holds a 1.14% stake in Tesla, valued at roughly $17 billion.
Tesla’s board, led by chair Robyn Denholm, has strongly endorsed the plan, warning that rejecting it could risk Musk’s departure from the company.
Baron Capital, another significant investor, has also announced support, while Tesla’s largest institutional shareholders, including BlackRock, Vanguard, and State Street, have not disclosed their voting intentions.
Proxy advisers ISS and Glass Lewis have recommended rejecting the package, citing high payouts even if only some performance goals are met and the potential for shareholder dilution.
Tesla shares were down 3.4% at about $452 in the early afternoon on Tuesday, giving the company a market cap of $1.42 billion.