Tesla, Norwegian fund opposes Musk's trillion-dollar pay plan

Although the package can award shares worth up to $1 trillion over 10 years, the cost of those shares at the time of award will be deducted, making the value for Musk slightly lower, up to $878 billion, according to a Reuters analysis.

"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 risk mitigation for the key person, in line with our views on executive remuneration," Norges Bank Investment Management said on its website.

The fund, Tesla's seventh largest shareholder with a 1.12% stake worth $17 billion, also voted 'no' to Musk's previous remuneration plan, prompting a harsh reaction from the CEO, who declined an invitation to a conference in Oslo.

Several groups have tried, unsuccessfully, to block record payments to Musk, including a $56 billion compensation plan for 2018 that investors re-approved last year, although legal disputes remain.

On Tuesday, NBIM also stated that it will vote against two of the three Tesla directors up for re-election, refusing to support board veterans Kathleen Wilson-Thompson and Ira Ehrenpreis, while supporting Joe Gebbia, who joined the board in 2022.

The $2.1 trillion Norwegian fund has also stated that it will vote against Tesla's proposed general equity compensation plan for all employees, which can also be used by the board of directors to benefit Musk.

Tesla states that its CEO will earn 'nothing' unless the company's market value grows substantially and that the maximum premium will only be paid if the group reaches several milestones, notably a market value of $8.5 trillion, a nearly sixfold increase.

Yet, according to experts on executive compensation, corporate valuations, robotics and automotive trends, Musk could still earn tens of billions of dollars without achieving many of these goals.

Major US investment companies are under pressure from Republican politicians to pay less attention to environmental, social and governance issues in the companies they invest in, and Musk has been an ally of President Donald Trump.

Political pressure makes it more difficult for large investors to vote independently, said Matt Moscardi, CEO of data analysis firm Free Float Analytics. Major investors, Moscardi said, quoted by Reuters, "at this point, they almost can't vote against management".