Tesla shareholders will again vote on Elon Musk’s $56 billion pay package from 2018 this week. The Norway wealth fund announced it will be voting against Musk’s 2018 pay package.
Norway’s sovereign wealth fund is estimated to be worth $1.7 trillion and is Tesla’s eighth-biggest shareholder, reported Reuters. The fund’s data shows that it holds 0.98%, or $7.7 billion, of TSLA stock.
According to the Norges Bank Investment Management (NBIM), which manages the fund, there is some concern over the amount of Elon Musk’s $56 billion pay package.
The fund acknowledged “the significant value generated under Mr. Musk’s leadership since the grant date in 2018.” However, “we remain concerned about the total size of the award, the structure given performance triggers, dilution, and the lack of mitigation of a key person risk.”
In April 2024, Tesla filed paperwork so shareholders could approve Elon Musk’s 2018 pay package again. The filing included a letter written by Tesla Chairperson Robyn Denholm, who declared that the Tesla Board disagreed with the Delaware Court’s ruling on Musk’s $56 billion pay package.
“Elon Musk has not been paid for any of his work for Tesla for the past six years…That strikes us, and the many stockholders from whom we already have heard, as fundamentally unfair,” Denholm wrote.
At the beginning of 2024, Judge Kathaleen McCormick in the Delaware Court of Chancery voided Elon Musk’s pay package from 2018, which included a maximum value of $56.8 billion and a $2.6 billion grant date fair value. Musk would only be granted maximum value if he hit all the goals in the pay package, which he achieved.
Billionaire Ron Baron believes Tesla shareholders should honor Elon Musk’s 2018 pay package.
“When the contract was signed, [Tesla’s] market value was $53 billion. It got as high as a trillion, and it’s now $550 billion. I think in the next ten years, we’ll make 4-5 times our money again in Tesla,” Baron said.
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