Tesla Faces High-Stakes Vote on Elon Musk’s Proposed $1 Trillion Pay Package
Tesla shareholders are set for a pivotal decision as the company’s annual general meeting approaches on Thursday, with a major vote on whether chief executive Elon Musk should receive a compensation package that could eventually be worth nearly $1 trillion.
In the run-up to the vote, Tesla has launched an extensive campaign to rally shareholder support, including targeted digital advertising and a dedicated website featuring senior board members praising Musk’s leadership. The push comes at a time when Musk’s outspoken public persona and increasingly political commentary have sharply divided investors and the wider public.
Musk, who has taken to his social media platform X to defend the proposal, suggested that Tesla’s broader mission – and even the “future of civilization” – rests on the outcome. He also highlighted endorsements from prominent supporters including Michael Dell, Ark Invest’s Cathie Wood, and his brother Kimbal Musk, who sits on Tesla’s board.
However, critics argue the timing is questionable. Tesla’s vehicle sales have weakened, and some investors say the company has lost focus.
“It’s surprising that a company working to stabilize demand for its cars is spending resources campaigning for an executive pay vote,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, who has reduced his Tesla holdings in recent years. He believes the company should refocus on electric vehicle sales.
What the Package Involves
The proposed deal would not grant Musk an immediate payout. Instead, he would receive over 423 million shares only if Tesla’s market value climbs from roughly $1.4 trillion today to $8.5 trillion, alongside major progress on self-driving technology – including commercial deployment of one million “robotaxi” vehicles.
The plan resembles a previous multibillion-dollar compensation agreement that helped propel Tesla’s valuation upward. However, that earlier deal was struck down in a Delaware court this year, with a judge ruling that the board had been too closely aligned with Musk. That decision is still under review.
Corporate governance experts say Tesla’s latest effort to rally votes is unprecedented.
“It is extremely rare to see this level of lobbying around an executive compensation decision,” said Columbia Law School professor Dorothy Lund.
Key Investors Push Back
Two major proxy advisory firms, Glass Lewis and Institutional Shareholder Services, have urged shareholders to vote against the package, arguing it is excessive and could dilute shareholder value. Norway’s sovereign wealth fund – the world’s largest – and U.S. pension giant CalPERS have also signaled opposition.
Some critics warn the board is prioritizing Musk over its duty to shareholders.
“The board’s job is to hold leadership accountable, not advocate for them,” said economist Matthew Kotchen of Yale University.
Retail Shareholders Could Prove Decisive
Analysts say Tesla’s large and loyal base of individual investors could determine the outcome. Many of them strongly back Musk and credit his leadership with the company’s rise.
The upcoming vote is being described as one of the most consequential in Tesla’s history, with Morgan Stanley analyst Adam Jonas noting that there is a “distinct possibility” the proposal may fail.
While Musk’s supporters argue his unconventional approach and track record in innovation justify the extraordinary package, others point to recent controversies that have affected Tesla’s brand image and market performance.
The central question now is whether shareholders believe Musk remains essential to Tesla’s future – and if that future is worth a potential $1 trillion reward.
