Norway's sovereign wealth fund, the world's largest, will vote against ratifying Tesla CEO Elon Musk's proposed pay package, which includes shares worth up to $1 trillion, at Tesla's annual general meeting this week.
Investors in the electric vehicle maker will decide on Nov. 6 whether to approve the package, potentially the biggest CEO pay deal ever, which critics have called excessive.
Tesla's board is pushing shareholders to approve the plan, with Chairwoman Robyn Denholm warning last week that Musk could leave the company if the deal is rejected.
While the package could grant up to $1 trillion worth of stock over 10 years, the cost of those shares at the time of vesting will be deducted, making Musk worth slightly less at $878 billion, according to a Reuters analysis.
"While we appreciate the significant value created under Mr. Musk, we are concerned about the overall size of the compensation" and the lack of risk mitigation for key individuals, Norges Bank Investment Management said on its website.
The Norwegian fund, Tesla's seventh-largest shareholder with a 1.12 percent stake worth $17 billion, also voted no on Musk's previous pay plan, which was initially worth up to $56 billion, prompting a sharp backlash from the CEO, who declined an invitation to a conference in Oslo.
The fund also announced on Tuesday that it will vote against two of Tesla's three CEO candidates for re-election.
The $2.1 trillion Norwegian fund also said it would vote against Tesla's proposed general stock-based compensation plan, which is reserved for all employees and can also be used by the board to benefit Musk.
Tesla says its CEO will earn "nothing" unless the company's market value rises significantly, and that the maximum pay is only paid if the group hits several milestones, most notably a market value of $8.5 trillion, a nearly six-fold increase.
But Musk could still rake in tens of billions of dollars without meeting many of those goals, according to experts in executive pay, company valuations and auto industry trends.
