Norway’s Sovereign Wealth Fund to Vote Against Tesla CEO’s Proposed $1 Trillion Compensation Package

Norway’s sovereign wealth fund, one of the largest investors in Tesla, has announced that it will vote against a proposed compensation package for CEO Elon Musk that could potentially pay him up to $1 trillion over the course of a decade. The decision was made public on Tuesday, just two days before Tesla’s annual meeting where more than a dozen company proposals will be up for a vote.

The Norwegian fund, known as the Government Pension Fund Global, is worth over $1 trillion and is considered to be one of the world’s largest sovereign wealth funds. It holds a 1.4% stake in Tesla, making it one of the electric car company’s biggest investors. The fund’s decision to vote against Musk’s proposed compensation package is a significant move that could potentially impact the outcome of the vote.

The proposed compensation package, which was first announced in January, has been met with criticism and controversy. It includes a 10-year grant of stock options that would be awarded to Musk in 12 tranches, each dependent on the company’s performance. If all 12 tranches are achieved, Musk could potentially earn up to $1 trillion, making it one of the largest compensation packages in history.

The Norwegian fund has stated that it believes the proposed package is too generous and does not align with the company’s long-term interests. In a statement, the fund’s CEO Yngve Slyngstad said, “We believe that the compensation package proposed for Tesla’s CEO is excessive and does not reflect the long-term interests of the company or its shareholders.”

The fund’s decision to vote against the package is not the first time it has taken a stand against excessive executive compensation. In 2016, it voted against a similar proposal for Alphabet Inc’s Google, citing concerns over the company’s long-term performance.

Tesla’s annual meeting on Thursday will see shareholders vote on a number of proposals, including the re-election of three board members and a proposal to split the chairman and CEO roles, which are currently held by Musk. However, the vote on Musk’s compensation package is expected to be the most closely watched and highly debated.

The proposed package has also been met with criticism from proxy advisory firms, who have recommended that shareholders vote against it. Institutional Shareholder Services (ISS) has stated that the package is “unprecedented” and “excessive,” while Glass Lewis has called it “unreasonable.”

Despite the criticism, Tesla’s board of directors has stood by the proposed package, stating that it is necessary to retain Musk and incentivize him to continue leading the company. In a statement, the board said, “We believe the proposed compensation package is essential to Tesla’s long-term success and that it is in the best interests of our shareholders.”

Musk, who is also the founder of Tesla, has been instrumental in the company’s success and is widely credited for revolutionizing the electric car industry. However, his leadership has also been marred by controversies and erratic behavior, including his recent Twitter outbursts and clashes with analysts during earnings calls.

The outcome of Thursday’s vote remains uncertain, with both supporters and opponents of the proposed package making their voices heard. However, the decision by Norway’s sovereign wealth fund to vote against it is a significant development that could sway other shareholders to follow suit.

In conclusion, the proposed $1 trillion compensation package for Tesla’s CEO Elon Musk has sparked a heated debate among shareholders and investors. While some believe it is necessary to retain Musk and drive the company’s long-term success, others view it as excessive and not in the best interests of shareholders. With the decision by Norway’s sovereign wealth fund to vote against the package, the outcome of Thursday’s vote remains uncertain, but one thing is for sure – it will be closely watched by the entire business world.