Norway’s sovereign wealth fund has voted against a Tesla proposal to give CEO Elon Musk a compensation package worth a significant amount. The fund, which is managed by Norges Bank Investment Management, holds a 1.14 percent stake in Tesla valued at about 11.7 billion dollars as of its mid-year filings in June.
The fund stated that while it appreciates the significant value created under Mr. Musk’s visionary role, it is concerned about the total size of the award, the dilution of shares, and the lack of mitigation for key person risk. The fund said these concerns are consistent with its general views on executive compensation. It also noted it will continue to seek constructive dialogue with Tesla on this and other topics.
The fund’s rejection may not be enough to defeat the proposal on its own. However, it is the latest hurdle in Tesla’s lengthy campaign to convince shareholders to approve the largest corporate performance pay package in history for Mr. Musk. Other advisory groups have also recommended voting against the pay package.
Mr. Musk has argued that the compensation package is not as much about the money as it is about maintaining his control of the company. The CEO recently made this point during the company’s third-quarter earnings call and has threatened to leave Tesla if the package is not approved.