Musk Malcontent: Tesla CEO’s Pay Package Pushback Intensifies

29 October 2025

---

By Jack Grogan-Fenn

Advocacy organisation Majority Action has added its voice to the pushback against US electric vehicle (EV) manufacturer Tesla CEO Elon Musk’s highly controversial U$1 trillion pay package, setting out six key reasons for shareholders to vote against the management resolution at next month’s AGM.

The six reasons set out for opposing the pay package were: its being “completely divorced from any objective market benchmarks or sense of proportionality”; Musk making an “extraordinary amount of money even if he mostly fails and only delivers on the least ambitious benchmarks”; the product delivery goals outlined in the pay package being “vague and subject to interpretation by the board”; the pay package potentially risking permanently “dilute[ing] shareholders’ ownership stakes” while potentially delivering only short term gains; the incentives being “unnecessarily generous” considering that Musk’s wealth is “already inextricably linked to Tesla success”; and its establishing a “shocking” CEO to median worker pay ratio.

The basic structure of the pay package comprises 12 tranches of 1% of the company’s shares, totalling almost U$1 trillion if all milestones are met. These milestones include 12 market capitalization goals – starting at U$2 trillion and going up in increments of U$500 billion, with the last two increments of U$1 billion to a total of U$8.5 trillion – and 12 separate operational goals.

“The pay package could give Musk a massive payout even if he mostly fails,” Majority Action stated. “The benchmarks set for Musk are less ambitious than how they have been framed by the company’s board, including product development goals that are vague and subject to interpretation. And if Musk does meet all the milestones and secures the U$1 trillion pay package, he would be paid thousands of times what other CEOs have been paid for more dramatic growth in shareholder value.”

Tesla’s CEO Musk has recently reiterated threats to quit the company if his pay package is not approved by shareholders at the upcoming AGM on 6 November and reportedly went as far as to hijack a recent call with investors to campaign for his pay package. This week, Tesla Board Chair Robyn Denholm reportedly said that the company risks losing Musk if his pay package is not approved and urged shareholders to vote in favour of the proposal in a letter sent to investors.

The State Board of Administration of Florida Retirement System has also sent an exempt solicitation to other Tesla shareholders requesting that they vote in favour of the pay package, describing it as a “bold, performance-driven incentive structure”. It also argued that the 2025 plan “sets a new standard for executive compensation by demanding extraordinary results and reinforcing Tesla’s ambition to achieve unprecedented scale and impact in the industry”.

Musk recently reportedly branded two proxy advisors as “corporate terrorists” after they recommended shareholders vote against his pay package, adding that they had made “many terrible recommendations in the past that if those recommendations had been followed, it would have been extremely destructive to the future of the company”. The same proxy advisors recommended shareholders vote against Musk’s U$56 billion pay package which was ratified by Tesla shareholders last year but is currently still held up in court.

Meanwhile, a Schedule 14a filing with the SEC by Tesla made last week urged its shareholders to “take back your vote from proxy advisors” arguing that their benchmark approach is “incapable of accounting for the sort of extraordinary growth Tesla has experienced”. It also argued that “their analysis cannot distinguish between innovation and risk, or between ambition and mismanagement”, adding that their recommendations are “disconnected from financial reality” and “view governance as being disconnected from financial returns”.

Whilst Tesla and Musk have criticised proxy advisors, Minerva Analytics does not treat companies as adversaries and operates with a fiduciary duty to institutional investors to provide independent and rigorous analysis, research and data that reflects the governance priorities of clients to enable them to make informed voting decisions. Minerva does not make an explicit voting recommendation to clients, all of whom receive customised voting recommendations according to their own voting policy.

Minerva rejects the accusations of “terrorism”. Musk’s solicitation campaign mischaracterises the role of research analysts and their input to client voting decisions. Minerva provides independent, policy-driven analysis and client-specific vote recommendations; we do not publish a single house vote.

Last year, Tesla reincorporated in Texas from Delaware after a major pay package for CEO Musk was annulled by a judge in the latter state, who ruled that the pay package was “unfathomable”. Musk responded by posting “never incorporate your company in the state of Delaware” on social media.

Musk has courted controversy from many quarters this year. This includes his prominent involvement with the infamous US Department of Government Efficiency (DOGE), a high-profile fallout and split from US President Donald Trump, attempts to meddle in political affairs abroad – including in Germany and the UK – and the formation of a new political party. The latter saw Tesla shareholders’ concerns piqued and calls for Tesla’s board to curb the activities of Musk following the launch of the America Party. A recently released working paper from the National Bureau of Economic Research by Yale University economists  found that Tesla’s US sales would have been between 67% and 83% higher, or about 1 million to 1.26 million additional vehicles, from October 2022 to April 2025, coinciding with the peak of his political involvement. However, it has not been an entirely bad year for Musk, who has reportedly become the first person to reach a net worth of U$500 billion.

Tesla has faced various challenges from shareholders over corporate governance practices this year. This has included Tesla shareholders sending a letter earlier this urging fellow investors to vote against CEO Elon Musk’s proposed U$1 trillion pay package and to oppose the re-election of three directors at the company’s November AGM, as reported by Minerva Analytics. The letter urged Tesla’s shareholders to oppose the re-election of Directors Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson (Proposal 1), the Amended and Restated 2019 Equity Incentive Plan (Proposal 3) and the 2025 CEO Performance Award (Proposal 4).

The letter was sent by shareholders including New York City Comptroller Brad Lander on behalf of the New York City Employees’ Retirement System, the New York City Teachers’ Retirement System, and the New York City Board of Education Retirement System and Comptroller of Maryland Brooke E. Lierman. The letter was additionally signed by the State Treasurers of Colorado, Nevada and New Mexico, as well as SOC Investment Group and SHARE (Shareholder Association for Research and Education).

These shareholders expressed concern that the Board “remains fixated on pleasing Mr. Musk, rather than responsibly addressing his many varied pursuits, at least some of which have come at the expense of Tesla shareholders”, a concern that was similarly echoed by Majority Action. They additionally stated that since Tesla’s 2024 AGM, the company has demonstrated erratic performance, lack of board oversight of management, a lack of demonstrably independent representation on the board and inappropriate and excessive remuneration.

In August, the SOC Investment Group published a letter raising concerns regarding the announcement of an approximately U$29 billion equity grant to Elon Musk without any shareholder approval or expense recognition. Concerns cited by the group included “questionable shareholder approval, an “unclear motivation to incentivize” and the fact that Musk has devoted significant time and attention to non-Tesla undertakings, including companies such as SpaceX and xAI, his takeover of Twitter and rebranding as X, and his participation both in electoral politics and leading DOGE.

Tesla faces eight shareholder proposals at its upcoming AGM, seven of which company management has recommended a vote against. The only shareholder resolution that a case-by-case recommendation has been issued for is to request the Board to authorise an investment in xAI, the AI startup founded by Musk in 2023. Musk has previously lobbied for Tesla to invest in xAI, in July commenting that “if it was up to me, Tesla would have invested in xAI long ago”.

The other shareholder proposals include requesting the Board to: adopt targets and report on metrics assessing the feasibility of integrating sustainability metrics into senior executive compensation plans; take the steps necessary to amend the Bylaws so that a lower threshold for shareholder derivative suits; amend Article X of the Bylaws to require shareholder supermajority approval before adopting restrictions under Texas law; and first receive shareholder approval for any bylaw changes imposing stricter ownership or solicitation requirements for shareholder proposals.

Separately, a different group of institutional shareholders with 7.9 million shares wrote to the Tesla board raising concerns about compensation, succession planning, outside board commitments and director independence in May, which was reported by Minerva Analytics. The group of pensions fund investors at Tesla had sent a letter to the Chair of the company’s board demanding that CEO Elon Musk work at least 40 hours per week before any new compensation plan is approved. It was signed by 12 institutional investors collectively representing U$950 billion in AUM.

Even the date of Tesla’s 2025 AGM was controversial, with the company announcing in July that the meeting would occur in November, almost four months after the latest date that the company was supposed to hold its annual shareholder meeting under local laws, as reported by Minerva Analytics. Tesla’s 2024 AGM took place on 13 June meaning the 2025 AGM should have taken place by 13 July this year.

SHARE had coordinated a group of Tesla shareholders representing more than U$1.5 trillion in AUM in sending a letter to Tesla’s Board of Directors which demanded that company announce the date of its next AGM. The letter was signed by investors including Akademiker Pension, Ethos Foundation, the New York City Comptroller, University Pension Plan and Velliv. SHARE additionally cited a coalition of seven US state treasurers, as well as other treasurers, that collectively oversee hundreds of millions of dollars of investment in Tesla, calling on the company to strengthen board accountability and improve transparency to shareholders.

You can read more of our articles by clicking here.

Last Updated: 29 October 2025