In a move that underscores growing tensions over executive compensation in the tech sector, Norway’s sovereign wealth fund, managed by Norges Bank Investment Management, has voted against Elon Musk’s proposed $1 trillion pay package at Tesla. This decision, announced on November 4, 2025, highlights concerns about the package’s unprecedented size, potential dilution for shareholders, and inadequate safeguards against key-person risks. As one of Tesla’s largest institutional investors, holding about 1.14% of the company’s shares, the fund’s stance could influence other shareholders ahead of the annual general meeting later this week.

The package, which could make Musk the world’s first trillionaire if fully realized, is tied to ambitious performance milestones, including Tesla achieving a $10 trillion market capitalization. Critics argue it exacerbates wealth inequality and prioritizes one individual’s incentives over broader corporate governance. According to reports from The Guardian, the fund stated it appreciates Musk’s contributions but remains ‘concerned’ about the deal’s structure.

The Scale of Musk’s Ambition

Musk’s compensation proposal builds on his previous 2018 package, which was initially valued at $56 billion but ballooned due to Tesla’s stock surge. The new plan, proposed in early 2025, escalates the stakes dramatically, offering Musk stock options that vest upon hitting targets like revenue growth, autonomous driving advancements, and expansion into new markets such as robotics and energy storage. CNBC reports that fund managers expressed worries over ‘the total size of the award’ and its potential to dilute existing shareholders’ value.

This isn’t the first time Norway’s fund has opposed Musk’s pay. In 2024, it voted against his $56 billion package, citing similar issues, as noted in posts on X (formerly Twitter) from that period. However, the 2025 rejection comes amid Tesla’s evolving challenges, including fluctuating EV demand and competition from Chinese manufacturers. The fund’s decision aligns with its principles of sustainable investing, emphasizing long-term value over short-term gains.

Investor Sentiment and Market Reaction

Reactions on X have been mixed, with some users like @OpenOutcrier highlighting a 2.5% pre-market drop in Tesla’s stock following the announcement on November 4, 2025. Other posts from financial accounts such as @byul_finance emphasized the dilution risks, reflecting broader investor unease. Tesla’s shares have been volatile this year, influenced by factors like U.S. election outcomes and Musk’s involvement in politics.

Major shareholders are divided. While some, including retail investors loyal to Musk, support the package for incentivizing innovation, institutional heavyweights like the Norwegian fund are pushing back. Reuters detailed that the fund, Tesla’s sixth-largest institutional investor, owns stakes worth billions, giving its vote significant weight.

Governance Concerns at the Forefront

The Norwegian fund’s opposition is rooted in its governance guidelines, which prioritize transparency and risk mitigation. In a statement reported by Business Insider, Norges Bank Investment Management noted, ‘We remain concerned about the total size of the award, dilution, and lack of mitigation of key person risk.’ This echoes sentiments from proxy advisory firms that have historically scrutinized Tesla’s board for perceived conflicts of interest, given Musk’s dual roles at multiple companies.

Beyond the fund, other investors like CalPERS and Glass Lewis have signaled skepticism in past votes, though their positions on the 2025 package remain unclear as of November 4. The debate extends to whether such mega-packages align with shareholder interests or merely enrich executives disproportionately. Tesla defends the plan as essential for retaining Musk, whose vision has driven the company to a market cap exceeding $1 trillion.

Historical Context of Tesla’s Pay Debates

Looking back, Musk’s 2018 package faced legal challenges, including a Delaware court ruling it void in 2024, only for shareholders to reapprove a modified version. The Australian Financial Review reports that the current $1 trillion proposal—sometimes cited as $1.5 trillion in varying estimates—amplifies these issues amid Tesla’s push into AI and full self-driving technology.

Posts on X from 2024, such as those from @FinancialTimes and @Barchart, show a pattern of opposition from the Norwegian fund, which held 0.98% of Tesla shares worth $7.72 billion at the end of 2023. This consistency underscores the fund’s role as a steward of ethical investing, managing assets derived from Norway’s oil revenues.

Broader Implications for Tech Compensation

The rejection could set precedents for other tech giants, where CEO pay often ties to stock performance. Analysts quoted in AP News suggest that if the package fails, Musk might divert attention to ventures like xAI or SpaceX, potentially harming Tesla’s focus.

Market watchers are monitoring the annual meeting closely, with Sherwood News noting it’s the first major investor to disclose its vote against the package. Sentiment on X, including from @PipsyMomma, questions the ethics of such payouts, stating ‘No one deserves this kind of pay package.’

Tesla’s Strategic Crossroads

Tesla faces headwinds, including declining sales in China as reported in recent X buzz, compounding the pay controversy. The company’s shift toward autonomy and robotaxis hinges on Musk’s leadership, making the package a litmus test for investor confidence.

Despite opposition, Musk has vocal supporters. Yahoo Finance highlights that some shareholders view the deal as justified given Musk’s track record of value creation. The vote’s outcome could reshape Tesla’s governance and Musk’s legacy.

Global Perspectives on Wealth Funds

Norway’s fund, the world’s largest sovereign wealth fund with $2 trillion in assets, invests in over 9,000 companies globally, adhering to strict ethical standards. Its Tesla stake, as per Wall Street Pit, reflects a balanced portfolio but prioritizes sustainability.

The decision also ties into broader discussions on executive pay amid economic inequality. As reported by Anadolu Agency, the fund’s 1.14% ownership amplifies its influence in shareholder democracy.

Looking Ahead to the Vote

As the annual meeting approaches, Tesla is rallying support through campaigns targeting retail investors, who hold a significant portion of shares. Musk himself has been active on X, defending the package as aligned with long-term growth.

Experts from The Information predict a close vote, with potential legal ramifications if approved or rejected. The saga encapsulates the high-stakes world of tech leadership and compensation.