World's Largest Wealth Fund: It's a No on Musk's $1T Pay Deal

Norway's sovereign wealth fund, the world's largest, has announced it will vote against Tesla CEO Elon Musk's proposed $1 trillion pay package. The fund, which holds a $17 billion stake in Tesla, cited concerns about the award's scale, potential dilution, and what it calls "key person risk"—the problem of relying too heavily on one executive, per the Guardian. The Norges Bank announcement comes just before Tesla's annual shareholder meeting on Thursday, where investors will decide whether to approve the unprecedented compensation deal.

The fund claims about a 1.16% stake in Tesla, the sixth biggest holding among institutional investors, per the AP. If approved, the package could make Musk the world's first trillionaire, increasing his Tesla stake from about 16% to over 25% if the company's value rises from $1 trillion to $8.5 trillion over the next decade, per the Guardian. The fund said it recognizes Musk's significant contributions to Tesla and wants to maintain a "constructive dialogue" with the company.

Other major shareholders and advisory groups, including Glass Lewis and ISS, have also recommended voting against the package. Several large pension funds, such as the California Public Employees' Retirement System, have expressed opposition as well. Baron Capital, however, says it will back the plan, per Reuters. This isn't the first time Norway's fund has rejected a hefty Musk payday—it also voted against his previous $56 billion award, a deal that was initially approved by shareholders but later struck down by a Delaware court, per the Guardian.