How Musk’s $1T Deal Would “Dilute” Other Tesla Investors, Sparking “No” Vote

A “no” vote from Norway’s sovereign wealth fund has put a spotlight on “dilution”—a key risk in Elon Musk’s $1 trillion pay package.
If the deal is approved, Musk, who already owns nearly 16% of Tesla, would receive new shares that push his stake to over 25%. This increase in his ownership would come at the expense of all other investors, “diluting” the value of their shares.
The Norwegian fund, a $17 billion shareholder, explicitly cited “dilution” as a primary reason for its “no” vote, alongside the award’s “total size.”
This concern for the value of existing shares is at odds with the board’s argument. Chair Robyn Denholm claims the real threat to value is Musk’s potential departure, which the $1 trillion deal is designed to prevent.
This focus on dilution is shared by other opponents, including advisory firms Glass Lewis and ISS, who have also recommended that shareholders reject the proposal.