The world’s largest sovereign wealth fund is set to vote against a $1 trillion (£766billion) pay deal for Tesla chief executive Elon Musk.
Norway’s £1.6 trillion oil fund – a top-ten shareholder in the electric car giant – said it was ‘concerned about the total size of the award’ despite ‘the significant value created under Mr Musk’s visionary role’.
The comments from Norges Bank Investment Management, ahead of the shareholder vote tomorrow, came days after the Tesla boss branded other critics of the package ‘corporate terrorists’.
Tesla’s board are pushing for shareholders to back what will be the biggest pay deal in corporate history with chairman Robyn Denholm warning Musk could leave if it is rejected.
But critics have labelled the package excessive and worry it will give Musk, 54, already the world’s richest man with a fortune of £365billion, too much power at the firm due to the huge share awards involved.
‘The vote will be a test of shareholders’ faith in Musk’s ability to deliver on his grand visions,’ said Dan Coatsworth, head of markets at AJ Bell.
Pay deal: Tesla boss Elon Musk (pictured) is pushing for a pay deal that would see him awarded $1trillion if he hits targets
Under the terms of the proposed deal, Musk (pictured) will hit the jackpot if the electric car giant hits certain targets over the next decade.
Currently valued at £1.1 trillion, the tycoon needs to turn Tesla into a £6trillion company while selling 12m vehicles, 1m artificial intelligence robots and 1m self-driving robotaxis.
The pay package would see Musk increase his stake from 13 per cent today to nearly 29 per cent and make him the world’s first trillionaire.
When shareholder proxy groups Glass Lewis and ISS came out against the deal, Musk branded them ‘corporate terrorists’ and said they had ‘no freaking clue’ about the business.
But Norges yesterday 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.’
However, opponents face an uphill battle given broad investor support.
And laws in Texas, where Tesla moved its headquarters last year, allow Musk to vote his own large stake, giving him some 13 per cent of voting power.
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