Economy|Automotive IndustryTesla’s proposed $1 trillion pay package for Musk faces investor push backThe electric carmaker had unveiled chief Elon Musk’s proposed $1 trillion compensation plan in September.
Institutional Shareholder Services (ISS) has advised investors to vote against Tesla's proposed $1 trillion compensation package for CEO Elon Musk, marking the second consecutive year of such a recommendation. This package could potentially become the…
Institutional Shareholder Services (ISS) has advised investors to vote against Tesla's proposed $1 trillion compensation package for CEO Elon Musk, marking the second consecutive year of such a recommendation. This package could potentially become the largest ever awarded to a company executive.
Impact of Proxy Adviser Recommendations
Proxy advisers like ISS significantly influence institutional investors, including passive funds with substantial Tesla holdings. The recommendation adds pressure on Tesla's board ahead of the shareholder meeting scheduled for Thu, Nov 6, 2025. Earlier, a Delaware court had nullified Musk's $56 billion pay package.
Despite falling short of ambitious targets, the compensation structure could award Musk tens of billions due to partial achievement rewards and rising share prices. Last month, Tesla's board proposed this package, citing the need to retain Musk's leadership and vision.
ISS highlighted that the package guarantees high pay opportunities for the next decade, limiting the board's flexibility to adjust future compensation levels. The plan sets high performance targets and aims to enhance Musk's control over the company.
This package could potentially become the largest ever awarded to a company executive.
Tesla's shares increased following the announcement, reflecting investor confidence in the incentive aligning Musk with company strategy. Director Kathleen Wilson-Thompson emphasized the importance of retaining Musk to attract talent.
Unlike the 2018 agreement, Musk can now vote using his shares, representing approximately 13.5% of Tesla's voting power, potentially influencing the approval outcome.
ISS valued the stock-based award at $104 billion, exceeding Tesla's $87.8 billion estimate. Vesting is contingent on achieving market capitalisation up to $8.5 trillion and operational milestones such as delivering 20 million vehicles, one million robotaxis, and $400 billion in adjusted core earnings.
The recommendations are part of a broader set of voting guidelines released by ISS. Tesla's stock rose by 2.4% to 3:45 pm in New York (19:45 GMT).
Based on reporting by Al Jazeera.