UPDATE: South Korea’s National Pension Service (NPS), the world’s third-largest pension fund with over $910 billion in assets, has just confirmed its support for Elon Musk’s unprecedented $1 trillion pay package as Tesla shareholders prepare for a crucial vote on Thursday, September 14, 2023. This move positions NPS on the opposite side of major global investors who are sharply divided over the controversial compensation plan.
In a disclosure filed Wednesday, NPS Investment Management announced its decision to back Tesla’s 2025 CEO performance award plan, which could grant Musk up to 424 million additional shares, increasing his ownership from 15% to approximately 25% if all performance targets are met. This ambitious compensation structure requires Tesla to achieve significant operational and market capitalization milestones, starting with reaching a market cap of $2 trillion and rising to $8.5 trillion by 2035.
The stakes are incredibly high. If successful, Musk’s total compensation could balloon to a staggering $1 trillion, eclipsing any CEO payment in corporate history. Critics, including prominent global proxy advisory firms ISS and Glass Lewis, have urged investors to reject the deal, labeling it “excessive” and misaligned with shareholder interests.
Supporters of Musk argue that his leadership is crucial for maintaining Tesla’s innovative edge and long-term value. Baron Capital, which holds about 0.4% of Tesla shares, emphasized that the company’s success is inextricably linked to Musk’s vision, urging fellow shareholders to approve the plan. However, opposing voices, including Norway’s Norges Bank Investment Management, have already cast their votes against Musk’s remuneration package, citing concerns over shareholder dilution and the risks of concentrating too much power.
NPS, holding approximately 0.18% of Tesla shares as of September, has also announced it will oppose other significant proposals during this vote, including a controversial plan that would allow Tesla to invest in Musk’s AI company, xAI. The fund expressed skepticism about whether such investments would enhance shareholder value. Additionally, NPS will vote against adding sustainability metrics to executive compensation and the appointment of two new directors, Ira Ehrenpreis and Kathleen Wilson-Thompson.
As Tesla stands as the most widely held foreign stock among South Korean retail investors, this vote carries profound implications for both the company’s future and the broader investment landscape. Shareholders are urged to stay tuned as the crucial vote approaches, with the outcome likely to shape the direction of Tesla and its leadership for years to come.
Stay updated for more breaking news as the situation develops.
