The world's largest sovereign wealth fund opposed Musk's $1 trillion bonus payment

Norway's state pension fund, the world's largest sovereign wealth fund, said it will oppose an unprecedented pay package for co-founder and CEO Elon Musk at Tesla's annual shareholder meeting on Thursday, Nov. 6. It is the first major institutional investor in the company to reveal its position ahead of the vote.

"While we appreciate the significant value created through Mr. Musk's visionary role, we are concerned about the overall size of the fee, the dilution [of shares] and the lack of measures to mitigate the risk of dependence on a key figure," Norges Bank Investment Management, Norway's sovereign fund manager, said in a statement.

Norges Bank explained that although Tesla shareholders will vote on November 6 during the annual meeting, it has technically already cast its vote, CNBC reports. The Norwegian sovereign fund's stake in Tesla is 1.2%, and it is the sixth-largest institutional shareholder in the company, The Wall Street Journal reported, citing FactSet data. It is the first major institutional investor to voice its position on the vote, the WSJ noted.

Tesla shares fell by 2.4% on the premarket in New York. They could also be affected by the data on the fall in deliveries of electric cars from the Chinese plant of the company - in October they decreased by 10% in annual terms.

Wedbush Securities analyst Dan Ives, a known Tesla supporter, expects "overwhelming approval" by the company's shareholders of the $1 trillion package "despite resistance." On Nov. 3, he reiterated a $600 target price on the company's stock with an Outperform rating.

That said, another optimist on Tesla - Morgan Stanley analyst Adam Jonas - warned clients on Oct. 30: "While most observers and bookmakers expect Elon Musk's much-publicized and heavily scrutinized $1 trillion long-term compensation package to win shareholder approval, there is a distinct possibility that this will not happen." In that case, Jonas predicts an "immediate sell-off in Tesla's stock" with a more than 10% price sag and a "shadow over the company's strategic future," Investor's Business Daily writes.

Tesla's board of directors is asking shareholders to approve Musk's nearly $1 trillion in stock compensation. The businessman will receive the shares if the company achieves a series of market capitalization and business targets, including delivering 20 million electric vehicles, putting 1 million robotaxis into service and reaching 10 million Full Self-Driving (FSD) subscribers on average per quarter. Musk himself - Tesla's largest shareholder with a stake of about 15% of voting shares - may also vote on the proposal. He has already urged shareholders to support his $1 trillion bonus - to work comfortably on "building an army of robots." And Tesla chairman Robin Denholm warned in a letter to shareholders ahead of the annual meeting that Musk could leave the company if the package is not approved.

This article was AI-translated and verified by a human editor