What's happened
Tesla shareholders face a vote on Elon Musk's proposed $1 trillion compensation plan, amid opposition from proxy firms ISS and Glass Lewis. They warn the plan is excessively dilutive and lacks sufficient oversight, raising concerns about Musk's control and shareholder value. The vote is scheduled for November 6, 2025.
What's behind the headline?
The opposition from proxy firms ISS and Glass Lewis highlights ongoing concerns about the governance and fairness of Musk's pay package. Both firms warn that the plan's size could significantly dilute existing shareholders' stakes—up to 11.3% according to Glass Lewis—and that the plan's structure may incentivize partial achievement of goals, undermining long-term value creation. Tesla's aggressive defense, emphasizing Musk's track record of growth and the plan's performance-based nature, reflects a broader debate about executive compensation in high-growth tech firms. The vote's outcome will likely hinge on Musk's influence, given his ownership stake and voting rights, especially as courts have previously voided his 2018 pay plan. The story underscores the tension between rewarding visionary leadership and safeguarding shareholder interests, with potential implications for corporate governance standards in innovative companies.
What the papers say
Bloomberg reports that proxy firms ISS and Glass Lewis have recommended voting against Musk's plan, citing concerns over dilution and governance. Bloomberg also notes that this marks the second year in a row ISS has opposed Musk's pay package, emphasizing ongoing skepticism about its size and structure. Business Insider UK highlights the split stance of proxy firms, with Egan-Jones offering conditional support under its 'Wealth-Focus Policy,' which ties compensation to performance, but criticizes other frameworks for governance risks. The article details the specific milestones Musk must meet to unlock the full payout, including reaching an $8.5 trillion market cap, which is vastly higher than Tesla's current valuation. Ars Technica discusses the lack of safeguards to ensure Musk's focus remains on Tesla, raising questions about the plan's primary rationale. Overall, the coverage reveals a complex debate about executive incentives, shareholder rights, and corporate governance in Tesla's context.
How we got here
Elon Musk's compensation plan, proposed for a vote on November 6, 2025, aims to award him over 423 million Tesla shares if certain operational and market milestones are met. The plan is designed to retain Musk's focus on Tesla amid his other ventures, but it has faced criticism for its size and potential impact on shareholder control. Proxy firms ISS and Glass Lewis have opposed the plan, citing risks of dilution and governance issues, while Tesla and Musk's supporters argue it aligns incentives and rewards performance.
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Elon Reeve Musk FRS is an engineer, industrial designer, technology entrepreneur and philanthropist. He is the founder, CEO, CTO and chief designer of SpaceX; early investor, CEO and product architect of Tesla, Inc.; founder of The Boring Company; co-foun
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Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. The company specializes in electric vehicle manufacturing, battery energy storage from home to grid scale and, through its acquisition of SolarCity, solar
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Institutional Shareholder Services Inc. is a proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise regarding share holder votes.
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Glass, Lewis & Co. (Glass Lewis) is a major American proxy advisory services company. As of spring 2019, Glass Lewis controlled 28% of the proxy advisory market for mutual funds; this makes it the second-largest company in the market behind Institutional.