Topline
A group of Tesla investors and state government officials are urging the company’s other shareholders to vote against the electric carmaker’s proposed new compensation package for CEO Elon Musk—which could be worth around $1 trillion if the company achieves a set of ambitious goals over the next decade.
A group of Tesla investors urged other shareholders to vote against CEO Elon Musk’s proposed pay package which could be worth as much as $1 trillion.
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Key Facts
A letter sent on Thursday urged Tesla shareholders to vote against the new pay proposal at the company’s annual shareholder meeting on November 6 and accused the board of harming Tesla’s reputation in their “relentless pursuit of retaining” Musk.
Signatories of the letter include Tesla investor SOC Investment Group, and American Federation of Teachers; the state treasurers of Nevada, New Mexico, Connecticut, Massachusetts, Colorado and the comptrollers of Maryland and New York City.
The investors and state officials allege that Tesla’s board is “made up of directors with close ties to the CEO,” and the proposed pay packages “provide so much discretion to Tesla’s Board that shareholders cannot be confident of impartial treatment.”
The letter notes Tesla’s “negative and highly volatile” operational and financial performance in last year’s annual meeting, including slumped Tesla sales in key European markets.
The letter also criticizes Tesla’s board and questions its ability to “provide objective, rigorous oversight of management,” citing its directors’ “deep personal and professional ties to CEO Musk.”
The letter adds: “We believe that these relationships have enabled a culture where the Board consistently fails to challenge Mr. Musk, even when his actions are detrimental to the Company’s value and its public shareholders.”
Crucial Quote
Investors and state officials argue Tesla’s board failed to ensure Musk devotes his “full attention to Tesla.” The letter adds: “The Board has permitted Mr. Musk to be overcommitted for years, allowing him to continue as CEO while taking time consuming leadership roles at his other companies, xAI/X, SpaceX, Neuralink, and Boring Company. Most recently, the Board apparently failed to intervene when Mr. Musk took a leadership position at the US Department of Government Efficiency (DOGE), a role widely seen as having a negative impact on the Company’s performance and brand.”
Have Any Other State Officials Commented On The Vote?
In a separate statement, New York State Comptroller Thomas P. DiNapoli said the New York State Common Retirement Fund—which holds Tesla shares—will vote against the proposal. “Musk’s significant stake in Tesla has failed to focus his attention on the company. Now, despite these distractions, Tesla proposes to reward Musk, currently one of the richest men in the world, with another unprecedented pay package. We have long opposed Musk’s excessive compensation proposals, and this package continues the troubling pattern of prioritizing him over the interests of every other Tesla shareholder.”
How Has Tesla Responded?
In a post on X, Tesla responded to DiNapoli’s statement, saying the proposed pay package “completely aligns Elon’s compensation & shareholder value creation.” The carmaker notes that if Musk “doesn’t deliver results, he receives nothing,” and adds: “We’re talking about trillions of dollars of value for shareholders + efforts that will accelerate global prosperity.”
Key Background
Tesla’s board outlined the proposed pay package for Musk last month in an SEC filing. Under the proposal, Musk would gain an additional 12% stake in the electric car maker spread across 12 tranches over the next 10 years if he meets a set of goals. To receive his full compensation reward, Musk will need to meet the ambitious goal of raising Tesla’s market cap from around $1.37 trillion at present to $8.5 trillion within a ten-year period.
Further Reading
Elon Musk Threatened To Quit Tesla Before $1 Trillion Compensation Deal (Forbes)
Source: https://www.forbes.com/sites/siladityaray/2025/10/03/teslas-1-trillion-pay-proposal-for-musk-faces-investor-pushback-what-we-know/
