A key concern for Norway’s sovereign wealth fund in rejecting Elon Musk’s $1 trillion pay deal is the “dilution” it would cause to other shareholders.
The fund, Tesla’s seventh-largest investor with a $17 billion stake, announced its “no” vote ahead of the annual meeting. If the package is approved and targets are met, Musk’s stake would jump from 16% to over 25%, diluting the value of all other shares.
In addition to dilution, the fund cited the “total size of the award” and “lack of mitigation of key person risk” as reasons for its opposition.
This stance pits the fund against Tesla’s board, which argues the package is necessary to retain Musk. Chair Robyn Denholm has warned that Musk’s departure would be a “significant value” loss for the very shareholders worried about dilution.
The Norwegian fund joins a growing list of opponents, including advisory firms ISS and Glass Lewis and major US pension funds, making the outcome of Thursday’s vote highly uncertain.