According to Manufacturing.net, Norway’s sovereign wealth fund announced Tuesday it will vote against CEO Elon Musk’s proposed compensation package that could pay him as much as $1 trillion over a decade. The fund, managed by Norges Bank Investment Management, holds a 1.16% stake in Tesla, making it the company’s sixth-largest institutional investor. This puts them directly against Baron Capital Management, which said Monday it will vote in favor of the package despite holding just 0.4% of outstanding shares. The vote happens Thursday during Tesla’s annual meeting, where more than a dozen company proposals are up for consideration. Musk himself holds 15.79% of all outstanding shares, making him the largest single investor.
The Great Investor Divide
Here’s the thing about this pay package fight – it’s not really about whether Musk deserves to be paid. Both sides acknowledge he’s created enormous value. The Norwegian fund literally said they “appreciate the significant value created under Mr. Musk’s visionary role.” Their objection comes down to three specific concerns: the total size, potential dilution, and what they call “lack of mitigation of key person risk.” Basically, they’re worried about what happens if Musk ever leaves and whether giving him this much stock is good for other shareholders.
Meanwhile, Baron Capital’s Ron Baron makes the exact opposite argument about that “key man risk.” He writes that “Elon is the ultimate ‘key man’ of key man risk” and that “without his relentless drive and uncompromising standards, there would be no Tesla.” So we’ve got two sophisticated investors looking at the same situation and reaching completely different conclusions. Makes you wonder who’s right, doesn’t it?
What’s Actually on the Table
Now let’s talk about what Musk is actually being offered. The package would give him shares worth up to 12% of the company, but here’s the catch – it’s broken into twelve separate packages tied to “ambitious performance targets.” We’re talking massive increases in car production, share price growth, and operating profit. So it’s not like he gets this for showing up to work – the company has to hit some seriously aggressive milestones.
But even with those performance hurdles, we’re still talking about a potential $1 trillion payout. That’s an almost unimaginable number. To put it in perspective, that’s more than the entire market cap of most companies. The question isn’t really whether Musk can deliver growth – he’s proven he can. It’s whether any single person should potentially control that much of a public company.
The Bigger Governance Question
This vote goes way beyond just Tesla. It’s becoming a referendum on how we value superstar CEOs in the tech industry. On one hand, you’ve got investors who believe extraordinary talent deserves extraordinary compensation. On the other, there are concerns about concentration of power and whether these packages are sustainable long-term.
And let’s be real – Musk isn’t your typical CEO. He’s running multiple companies simultaneously, from SpaceX to Neuralink to xAI. The “key person risk” the Norwegians are worried about isn’t theoretical. If Musk ever decided to focus entirely on one of his other ventures, what happens to Tesla? That’s the billion-dollar question. Or in this case, the trillion-dollar one.
Thursday’s vote will tell us a lot about where institutional investors are drawing the line on executive pay. But with Musk controlling nearly 16% of the vote himself, this fight was always going to be interesting. The real question is whether the opposition can muster enough support to actually block the package.
