Advisor Firms Warn Tesla Investors to Vote Against Elon Musk Trillion Dollar Pay Package

Two of the largest proxy advisor firms, organizations that give suggestions to major institutional investors, are urging Tesla stockholders to reject Elon Musk’s $1 trillion compensation plan. The compensation plan has been labeled by critics as too much, too risky, and a sign of poor oversight by the Tesla board.

The ‘Astronomical’ Price Tag Draws Fire

The first proxy advisor firm is the Institutional Shareholder Services (ISS), the largest proxy firm in the world. ISS recommended that shareholders vote "no," arguing that the award is excessive and poorly designed.

ISS stated there are "unmitigated concerns surrounding the special award's magnitude and design," and specifically cited the plan’s "astronomical grant value" in their report to investors.

The other major advisor, Glass Lewis, has historically taken a similar stance, having previously opposed Musk's compensation plans. They state that the pay package "warrants significant concern.” They also point to the potential for dilution, which means the value of existing shares could be lowered when new shares are issued to Musk.

Musk Threatens Tesla

However, instead of addressing the financial scrutiny, Musk resorted to a power play, referencing Tesla's dominant market position and daring shareholders to find a replacement. "Tesla is worth more than all other automotive companies combined. Which of those CEOs would you like to run Tesla? It won't be me," Musk posted on X.

Critics view this comment as a calculated attempt to force the hands of investors, using his status as leverage to secure an unprecedented payday. Musk's threat highlights what some analysts are calling the "Tesla Dilemma": the company's stock price and future vision are so tied to its CEO that shareholders feel compelled to approve his demands, no matter how outrageous.

This is despite how Musk’s promises that are keeping stock prices up are not fanning out. For example, his promises of self-driving cars has still not played out and requires a person to oversee the driving and falls behind competitors like Waymo. Additionally, Musk seems to be occupied with other projects and companies, especially with SpaceX and xAI.