Norway's Wealth Fund to Oppose Elon's $1 Trillion Deal

Norwegian Sovereign Wealth Fund announced on Tuesday that it would vote against an offered pay deal, worth a total of $1 trillion for CEO Elon Musk.  His pay package is likely to win, having garnered significant investor support in the past, as well as the backing of Tesla's substantial retail shareholder base. Last year, Tesla shifted its headquarters to Texas. According to Texas laws, Elon is allowed to vote for his own large stake, which provides him with 15.3% of the voting power, including restricted stock permission, as of August.

The opposition fromNorges Bank Investment Management, known for its responsible investment focus, was not a big surprise. However, a clear criticism of the compensation and a planned vote against Tesla's two board directors adds uncertainty to the outcome of a ballot set for Thursday, corporate governance experts said, and underscores how investors in other European countries may also turn against the electric vehicle manufacturer.

The Board of Tesla is putting pressure on shareholders to approve the plan, with Chair Robyn Denholm warning that Elon Musk could leave the $1.5 trillion market capital firm if the Deal is refused.

“European voters are much more likely to be swayed by where Norges goes, because of the general support of ESG (Environmental, Social and Governance) principles and concerns in their investment philosophy", said Francis Byrd, a partner at consulting firm Alchemy Strategies Partners. Earlier, Tesla's board granted CEO Elon Musk a substantial compensation package worth approximately $29 billion, despite ongoing legal challenges and shareholder disagreements.

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