Tesla’s $1 trillion pay proposal for Elon Musk rejected by world’s largest wealth fund

Tesla CEO Elon Musk’s $1 trillion pay package is seems to be in trouble. Norway’s sovereign wealth fund, the world’s largest with assets exceeding $2.1 trillion, has announced it will vote against Elon Musk’s proposed $1 trillion compensation package at Tesla’s upcoming shareholder meeting.

The move adds significant pressure on Tesla’s board and investors as they weigh the future of one of the most controversial executive pay deals in corporate history.Managed by Norges Bank Investment Management (NBIM), the fund holds a 1.14% stake in Tesla, valued at approximately $11.6 billion. In a statement, NBIM said it had already cast its vote against the package, citing concerns over the “total size of the award, dilution, and lack of mitigation of key person risk”.

A rebellion against Tesla’s board

Tesla’s board, led by Chair Robyn Denholm, has urged shareholders to approve the deal, warning that Musk might step down if the package is rejected. The proposed compensation is tied to long-term performance goals, including Tesla reaching a market capitalization of $8.5 trillion by 2035.While NBIM acknowledged Musk’s visionary leadership and the value he has created for Tesla, it described the pay package as “excessive and risky”, especially given Musk’s outsized influence and the lack of safeguards should he exit the company.

The rejection by Norway’s fund—Tesla’s seventh-largest shareholder—could sway other institutional investors and reignite debates over executive compensation in tech. The fund’s decision reflects broader concerns about governance, transparency, and the precedent such a massive payout could set.Despite the opposition, analysts believe the package may still pass due to strong support from Tesla’s retail investor base and Musk’s own voting power, bolstered by Tesla’s relocation to Texas, where corporate governance laws are more favourable.