Norway’s $2 trillion sovereign wealth fund said Tuesday it will vote against Elon Musk’s massive compensation package at Tesla’s (NASDAQ:TSLA) upcoming annual shareholder meeting, marking one of the most significant challenges yet to the billionaire CEO’s leadership.
Musk has previously cautioned that he might step down if shareholders reject the deal.
Norges Bank Investment Management (NBIM), which is one of Tesla’s largest institutional investors, confirmed it has already voted to reject Musk’s proposed pay plan.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk — consistent with our views on executive compensation,” NBIM said in a statement.
The fund added that it intends to “continue to seek constructive dialogue with Tesla on this and other topics.”
Following the announcement, Tesla shares fell 2.5% in premarket trading.
The move represents a notable act of shareholder opposition against Musk’s proposed $2 trillion compensation package, setting the stage for a tense vote at Tesla’s shareholder meeting later this week.