The financial institution responsible for managing the world’s largest sovereign wealth fund has delivered a significant setback to Elon Musk’s highly publicized $1 trillion compensation proposal. Norges Bank Investment Management (NBIM), the arm of Norway’s central bank that supervises the nation’s $2 trillion sovereign wealth portfolio, announced on Tuesday that it had formally cast its vote against the Tesla chief executive’s proposed pay arrangement. This decision was made in advance of the electric vehicle maker’s annual shareholder meeting, scheduled to convene on Thursday.
In a detailed statement accompanying its vote, NBIM acknowledged the remarkable economic value produced under Musk’s stewardship—crediting his strategic leadership for propelling Tesla to global prominence and extraordinary market success. However, despite this recognition, the fund expressed substantial reservations concerning several critical aspects of the proposed plan. Chief among these issues were the overwhelming size of the compensation package itself, the potential share dilution that could adversely affect existing investors, and an absence of safeguards to reduce Tesla’s heavy dependence on Musk’s singular leadership—a phenomenon known in corporate governance as “key person risk.”
It is worth noting that this position is consistent with the fund’s previous stance. As Tesla’s sixth-largest institutional shareholder, Norway’s sovereign fund had already voted against Musk’s similar compensation proposal during the 2024 deliberations. That earlier episode gained additional attention in January when leaked messages surfaced, revealing a frosty and somewhat personal text exchange between Musk and Norges Bank’s chief executive, Nicolai Tangen. In that exchange, the billionaire entrepreneur tersely reminded Tangen that “friends are as friends do,” underscoring the tension surrounding the issue.
Norway’s sovereign wealth fund now becomes the largest institutional investor to publicly disclose the details of its vote on the controversial proposal—an act that emphasizes its commitment to transparency and responsible stewardship. Holding approximately a 1.2% ownership stake in Tesla, the fund’s opposition carries not only symbolic significance but also a degree of financial weight in the broader context of shareholder governance.
The decision comes amid growing controversy surrounding the Tesla CEO’s enormous incentive plan. A number of prominent investor groups, including the California Public Employees Retirement System (CalPERS) and the New York State Retirement Fund, have articulated their own objections, questioning whether such a vast compensation arrangement aligns with shareholders’ long-term interests. Their skepticism has been echoed by influential proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS), both of which have urged investors to vote against the plan. In response, Musk—never one to remain silent—criticized these firms in a recent earnings call, dismissing them with the incendiary label of “corporate terrorists.”
Nevertheless, the debate remains far from uniform. Several institutional players, such as Florida’s State Board of Administration and ARK Invest founder Cathie Wood, have offered their support for Musk’s proposed pay structure, citing his visionary leadership and Tesla’s unprecedented growth trajectory as justification. Meanwhile, Tesla’s two largest institutional stakeholders, Vanguard and BlackRock, have notably refrained from disclosing how they intend to vote, leaving open the possibility that their decisions could exert significant influence on the final outcome.
At the heart of the controversy lies Tesla’s 2025 CEO compensation framework, an ambitious scheme that could ultimately reward Musk with approximately $1 trillion worth of company shares if he achieves a sequence of exceptionally demanding performance targets over the next decade. These goals include elevating Tesla’s overall market capitalization to a staggering $8.5 trillion, achieving the sale of one million Optimus humanoid robots, and delivering annual earnings surpassing those reported by current technology giants such as Meta and Google. The plan also requires laying the groundwork for Musk’s eventual succession—an acknowledgment that even the company’s most dynamic leader must one day prepare for transition.
In essence, Norges Bank Investment Management’s opposition to Musk’s proposed compensation reflects a broader shift in the global investment community toward more rigorous oversight of corporate governance and executive remuneration. It highlights the increasingly complex balance between rewarding extraordinary innovation and protecting the collective interests of shareholders, employees, and future stakeholders alike.
Sourse: https://www.businessinsider.com/elon-musk-tesla-pay-package-norges-bank-investment-management-rejected-2025-11
