Oslo: Norway’s $1.6 trillion sovereign wealth fund, the world’s largest, has announced its decision to vote against Tesla CEO Elon Musk’s proposed $1 trillion compensation package. The move marks one of the most high-profile rebukes yet from an institutional investor amid growing unease about corporate governance and executive pay at the electric vehicle giant.
The decision by Norges Bank Investment Management (NBIM), which manages the Government Pension Fund Global, comes just days ahead of Tesla’s annual general meeting on November 6. Despite its strong opposition, the pay proposal is still expected to pass, given Musk’s large personal stake and support from a section of loyal shareholders.
NBIM, which owns about 1.12 percent of Tesla a stake valued at roughly $17 billion cited concerns about the excessive size of the award, shareholder dilution, and a lack of safeguards addressing what it termed “key-person risk.” While acknowledging Musk’s remarkable contribution to Tesla’s success, the fund stated that “such an unprecedented compensation plan raises critical questions about alignment between management and shareholder interests.”
The controversial 10-year pay package is tied to a series of performance milestones, including Tesla achieving an extraordinary market capitalization of $8.5 trillion. If those targets are met, Musk could unlock stock options valued at around $1 trillion, making it the largest executive reward in corporate history. However, critics argue that the goals are not aligned with realistic long-term sustainability objectives and could concentrate excessive power in the hands of one individual.
Proxy advisory firms ISS and Glass Lewis have both recommended that shareholders vote against the plan. They warn that the package could grant Musk an outsized influence over Tesla while excessively rewarding him even if only partial performance conditions are achieved. The firms also noted that the proposal could lead to major dilution for smaller shareholders.
Tesla’s board, however, maintains that the pay package is essential to retain Musk and keep him focused on the company’s ambitious growth trajectory. Board chair Robyn Denholm even suggested that rejecting the plan could risk Musk shifting his attention to other ventures, such as SpaceX, X (formerly Twitter), or Neuralink.
NBIM also announced it would withhold support from two Tesla directors up for re-election Kathleen Wilson-Thompson and Ira Ehrenpreis while backing Joe Gebbia, who joined the board in 2022. The fund’s stance reflects its broader concerns about board independence and accountability.
The Norwegian fund’s opposition carries symbolic weight. As one of the most influential institutional investors globally, its vote signals growing resistance among large shareholders to outsized executive compensation structures. In recent years, NBIM has become more vocal about corporate ethics, transparency, and sustainability, using its voting rights to push companies toward better governance standards.
This latest decision underscores a broader shift among global investors toward scrutinizing the balance between rewarding innovation and ensuring fairness. It also raises a fundamental question about whether modern corporations are becoming too dependent on their visionary founders.
For markets worldwide including emerging economies such as India the Norwegian fund’s move offers a timely lesson in shareholder activism. It demonstrates how major investors are using their influence to demand accountability, transparency, and equitable reward systems that prioritize long-term value over short-term gain.
While the Tesla vote is unlikely to derail Musk’s ambitious compensation plan, the message from Oslo is clear: the era of unchecked executive rewards may be nearing its limits. The fund’s public opposition reflects a growing insistence among institutional investors that success should be measured not only in market value but also in fairness, sustainability, and responsible corporate stewardship.