7 trillion sovereign wealth fund, announced on Saturday that it will vote against Elon Musk's $56 billion pay award at Tesla. As the eighth-largest shareholder in the electric vehicle maker, with a 0.98% stake valued at $7.7 billion, Norges Bank Investment Management expressed concerns over the size and structure of Musk's compensation package, which currently holds the title for the largest pay package in corporate America.

Addressing their stance, Norges Bank Investment Management cited multiple factors contributing to their decision. They stated appreciation for the significant value generated by Musk's leadership since the grant date in 2018. However, their concerns stemmed from the overall size of the award, the performance triggers governing the package, the potential dilution it may cause, and the lack of mitigation of key person risk.

The fate of Musk's pay award will be determined at Tesla's annual meeting on Thursday, where shareholders will have the opportunity to vote. The approval would require ratification of the pay package previously voided by a judge, along with the reinstatement of Tesla's incorporation in Texas, its home state, as reported by Reuters.

In January, a Delaware judge ruled on a lawsuit brought by a shareholder aiming to strike down Musk's salary, calling the amount an "unfathomable sum." The judge indicated that the pay package could potentially be voided. Last year, in a separate lawsuit filed by shareholders in 2020, Tesla's directors agreed to return $735 million to settle allegations of overpayment.

This decision by Norway's sovereign wealth fund adds to the growing scrutiny surrounding Musk's compensation. As Thursday's annual meeting approaches, the attention now lies on Tesla's shareholders and their verdict on the controversial pay award, which has already faced legal challenges and shareholder backlash.