Tesla’s $1 trillion incentive package for Elon Musk is facing stiff resistance from major investors, led by Norway’s sovereign wealth fund. The fund, one of Tesla’s largest shareholders, said it would vote against the proposal at the company’s annual meeting, citing serious governance concerns.
In a statement, the fund said it recognised Musk’s importance to Tesla’s success but could not endorse a deal that risks shareholder dilution and over-concentrates power. It noted that the plan’s size and structure were “inconsistent with sound executive compensation practices.”
The package links Musk’s rewards to Tesla achieving a valuation of $8.5 trillion within the next decade. If achieved, Musk’s ownership stake could exceed 25 %, significantly increasing his control and personal fortune. Critics have labelled the plan “unprecedented and excessive.”
Tesla’s board has defended the deal, with chair Robyn Denholm calling it “crucial for retaining the company’s founder and visionary.” She argued that Musk’s leadership has been instrumental to Tesla’s transformation into a global electric vehicle leader.
Yet the plan has attracted criticism from governance groups and investors alike. Proxy advisers Glass Lewis and ISS both recommended voting against the deal, citing its disproportionate scale and lack of risk mitigation. They also noted that Tesla’s recent performance does not justify such a substantial reward.
Tesla’s financial results show slowing growth and falling deliveries in several markets, including China and northern Europe. Some analysts suggest that rewarding Musk at this moment could alienate shareholders already concerned about performance volatility.
The Norwegian fund’s opposition adds to growing pressure on Tesla’s board. With other pension funds and institutional investors likely to follow, the outcome of Thursday’s vote could reshape investor expectations for executive pay transparency and accountability worldwide.