On the Dash:
- ISS has advised Tesla shareholders to vote against Musk’s $1 trillion compensation plan ahead of the Nov. 6 meeting.
- The proposed plan could grant Musk tens of billions even if performance targets are only partially met.
- Tesla defended the package as key to retaining Musk’s leadership amid expansion into robotics and AI.
Tesla’s proposed $1 trillion compensation plan for CEO Elon Musk is facing renewed scrutiny after proxy advisory firm Institutional Shareholder Services (ISS) urged investors to vote against it. The recommendation, issued Friday, adds pressure ahead of Tesla’s Nov. 6 shareholder meeting and intensifies debate over what could become the largest executive pay package in corporate history.
ISS cited the “astronomical” size and design of the stock-based award, which could still grant Musk tens of billions of dollars even if many of its ambitious goals are not fully met. The proposal includes milestones that would boost Tesla’s market capitalization to $8.5 trillion and require the delivery of 20 million vehicles, one million robotaxis, and $400 billion in adjusted core earnings over the next decade.
Tesla’s board said the record-setting plan was crafted to ensure Musk’s focus on the company’s long-term strategy as it expands into robotics and artificial intelligence. The company has argued that Musk’s leadership remains vital to maintaining Tesla’s growth momentum and attracting top engineering talent.
The proposed award follows the invalidation of Musk’s previous $56 billion pay package by a Delaware court earlier this year. In response, Tesla’s board introduced the new $1 trillion plan, calling it critical to the company’s future direction and investor value.
ISS, however, warned that the package “locks in extraordinarily high pay opportunities” and limits the board’s ability to adjust future compensation levels. The firm also noted that the award’s structure could significantly dilute existing shareholders’ stakes.
Despite the advisory firm’s objections, Tesla shares rose after the package was announced last month, reflecting optimism that the proposal could help secure Musk’s long-term commitment. The CEO, who holds about 13.5% of Tesla’s voting power, will be eligible to vote on the measure, giving him substantial influence over the outcome.
ISS also advised investors to reject a nonbinding proposal urging Tesla to invest in Musk’s separate artificial intelligence company, xAI, and recommended voting against the re-election of board member Ira Ehrenpreis. Tesla criticized ISS’s guidance on social media, calling it “misguided” and defending its compensation proposal as aligned with shareholders’ best interests.
