World's largest sovereign wealth fund opposes Musk's $1T Tesla package
What's the story
Norway's sovereign wealth fund, the world's largest, has announced its decision to oppose Tesla CEO Elon Musk's proposed compensation package. The package, which could be worth up to $1 trillion in shares, will be put to a vote at an annual general meeting this week. The decision comes as part of the fund's concerns over the total size of the award and potential dilution effects.
Concerns raised
Fund expresses concerns on its website
Norges Bank Investment Management, which oversees the fund, expressed its concerns on its website. The organization said, "While we appreciate the significant value created under Mr. Musk's visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk- consistent with our views on executive compensation."
Board's stance
Tesla board warns Musk could leave if deal is rejected
Despite the fund's opposition, Tesla's board is advocating for shareholders to approve the proposed compensation package. Robyn Denholm, Chair of the board, had warned last week that Musk could leave the company if the deal is rejected. The package could give Musk stock worth up to $1 trillion over a decade, but the cost of those shares at the time of the award will be deducted, making the value to Musk slightly lower at around $880 billion.
Vote details
Shareholder decision on Musk's compensation package set for November 6
The decision on Musk's compensation package will be made by Tesla shareholders on November 6. This could be one of the largest CEO pay packages in history, but has drawn criticism for being excessive. Despite the fund's opposition, Tesla's board remains firm in its support for the proposed deal.