Tesla loses support: investors deny Musk a cosmic reward

One of Tesla's largest investors, the Norwegian sovereign wealth fund, voted against a new compensation package for Elon Musk worth over $1 trillion. This is the first major institutional investor to publicly disclose its decision. This is reported by UNN with reference to The Wall Street Journal.

Details

Norges Bank Investment Management, a division of Norway's central bank that manages a $1.9 trillion fund, expressed concern about the scale of the proposed compensation.

"While we appreciate the significant value created under Mr. Musk's visionary leadership, we remain concerned about the total size of the award, its dilution, and the lack of mitigation of key person risk, consistent with our views on executive compensation."

Following the announcement, Tesla shares fell almost 3% in pre-market trading on Tuesday.

Addition

Tesla's annual shareholder meeting will be held on Thursday. Among the issues is a vote on Musk's compensation package, which provides for an additional 12% of the company's shares if he increases its value to $8.5 trillion within ten years. This is almost eight times Tesla's current valuation.

With a 1.2% stake, the fund is Tesla's sixth-largest institutional investor. Several US pension funds and consulting firms Institutional Shareholder Services and Glass Lewis also opposed the package.

Last year, the Norwegian fund already voted against another deal with Musk - the 2018 compensation package, which was later canceled by a Delaware state court.

Tesla will announce the results of the vote on Musk's new compensation package after the shareholder meeting.

Recall

Tesla sales are declining in Europe and the US, despite Elon Musk's attempts to secure the largest corporate payout in history. In October, a significant drop in registrations was recorded in Europe, while in the US, growth is linked to the expiration of tax credits.