The National Pension Service, the world’s third-largest pension fund with over $910 billion in assets, will vote in favor of Elon Musk’s record-setting $1 trillion pay package, backing the Tesla Inc. chief executive as global investors remain sharply divided ahead of a decisive shareholder vote in the US.
According to a disclosure filed Wednesday by its investment arm, NPS Investment Management, South Korea’s state-run fund has decided to support Tesla’s 2025 CEO performance award plan.
The fund, which holds about 0.18% of Tesla as of September, did not specify reasons for its decision to endorse Musk’s pay plan.
The vote places Korea’s largest institutional investor on the opposite side of several of its global counterparts, including Norway’s sovereign wealth fund.
Global proxy advisory firms ISS and Glass Lewis have also urged investors to reject the deal, calling it “excessive” and “misaligned with shareholder interests.”
A $1 TRILLION BET ON PERFORMANCE
Tesla shareholders are set to decide Thursday (US local time) whether to approve a new compensation package for Musk that could ultimately grant him 424 million additional Tesla shares, pushing his ownership to roughly 25% from the current 15% if all performance goals are met.
The plan divides Musk’s award into 12 tranches of stock, each tied to both operational and market-cap milestones.
The first market-cap target begins at $2 trillion, rising incrementally to $8.5 trillion by 2035 – far above Tesla’s current valuation of about $1.5 trillion.
Tesla would also need to hit ambitious operational goals, including expanding production of electric vehicles, subscriptions for self-driving software and new businesses such as robotaxis and humanoid robots.
On a profitability basis, Tesla must grow its trailing 12-month adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from about $16 billion last year to as much as $400 billion to unlock the full package.
If all goals are achieved, Musk’s total award could be worth roughly $1 trillion, a figure that would dwarf any CEO compensation in corporate history.
A DIVIDED VOTE
Supporters argue that Musk’s leadership is vital to Tesla’s innovation and long-term value creation.
Baron Capital, which holds about 0.4% of Tesla, said the company’s success “is inseparable from Musk,” urging shareholders to approve the plan.
Critics counter that the deal overconcentrates power and sets unrealistic financial goals.
Norway’s Norges Bank Investment Management said on Tuesday that it had already cast its vote against Musk’s remuneration package, citing concerns over the plan’s size and potential dilution of shareholder value.
In its filing, the NPS said it, however, will vote against a proposal allowing Tesla to use company funds to invest in Musk’s AI company, xAI, noting that “it is unclear whether it would enhance shareholder value.”
It will also oppose several other proposals, including a plan to add sustainability or environmental metrics to Tesla’s executive compensation, which the fund said does not address “specific issues that would harm shareholder value.”
It will likewise vote against a proposal to appoint two directors, Ira Ehrenpreis and Kathleen Wilson-Thompson.
Tesla is the most widely held foreign stock among South Korean retail investors.
