OSLO, Nov 4 (Reuters) - Norway's sovereign wealth fund,

the world's largest, said on Tuesday it would vote against

ratifying Tesla CEO Elon Musk's proposed compensation

package, containing shares worth up to $1 trillion, at an annual

general meeting this week.

Investors in the electric-vehicle maker will decide on

November 6 whether to approve the package, likely the

largest-ever CEO compensation agreement, which critics have

called excessive.

So far, the Norwegian wealth fund is the largest outside

Tesla investor to say how it plans to vote. The next-largest to

do so, Baron Capital, on Monday said it would back Musk's pay

package.

The company's largest institutional investors, including

BlackRock, Vanguard and State Street, have yet to disclose their

voting plans.

PRAISING VALUE CREATION, BUT CONCERNED WITH OVERALL SIZE

Tesla's board is pushing for shareholders to approve the

plan, with Chair Robyn Denholm warning last week that Musk could

leave the company if the deal is rejected.

While the package could grant stock worth up to $1 trillion

over 10 years, the cost of those shares at the time of the award

will be deducted, making the value to Musk slightly lower, at up

to $878 billion, according to a Reuters analysis.

"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," Norges

Bank Investment Management said on its website.

The fund, Tesla's seventh-biggest owner with a 1.12% stake

worth $17 billion, also voted "no" to Musk's previous

compensation plan, drawing a sharp response from the CEO, who

turned down an invitation to a conference in Oslo.

Various groups have tried and failed to block record

payouts to Musk, including a $56 billion compensation plan for

2018 that investors reapproved last year, though legal

challenges remain.

NBIM on Tuesday also said it would vote against two out of

three Tesla directors who are up for reelection, declining to

back board veterans Kathleen Wilson-Thompson and Ira Ehrenpreis

while supporting Joe Gebbia, who joined in 2022.

The $2.1 trillion Norwegian fund also said it would vote

against Tesla's proposed general stock compensation plan, which

is intended for all employees and can also be used by the board

to benefit Musk.

Tesla says its CEO will earn "nothing" unless the company's

market value grows substantially and that the maximum award is

only paid if the group reaches several milestones, most notably

a market value of $8.5 trillion, a near six-fold increase.

Yet Musk could still reap tens of billions of dollars

without meeting many of those targets, according to experts in

executive pay, company valuations, robotics and automotive

trends.

Top U.S. investment firms are under pressure from

Republican politicians to pay less attention to environmental,

social and governance concerns at companies in which they invest

and Musk has

been an ally

of President

Donald Trump.

The political pressure makes it harder for large

investors to vote independently, said Matt Moscardi, CEO of

director analytics firm Free Float Analytics. Top investors,

Moscardi said, "at this point, almost can't vote against

management."