Tesla’s $1 Trillion Musk Pay Package Faces Mounting Opposition as Shareholder Vote Looms

Proxy Advisors Unite Against Historic Compensation Plan

Two of the world’s most influential proxy advisory firms have now taken a stand against what could become the largest corporate compensation package in history. Glass Lewis & Co. has joined Institutional Shareholder Services (ISS) in recommending that Tesla shareholders reject Elon Musk’s proposed $1 trillion pay deal, setting the stage for a dramatic showdown at the company‘s November 6 annual meeting.

Proxy Advisors Unite Against Historic Compensation Plan
The Dilution Dilemma: Calculating the Real Cost
Governance Concerns Resurface
Performance Thresholds Under Scrutiny
Tesla’s Fiery Response
The Focus Factor: Musk’s Multiple Ventures
Industry Support and Opposition
The Stakes for Corporate America

The coordinated opposition represents a significant challenge to Tesla’s board, which had hoped to secure overwhelming support for the compensation package that would grant Musk up to 423 million shares if he meets ambitious performance targets. Glass Lewis’s 90-page analysis, obtained by Business Insider, delivers a comprehensive critique of the proposal’s potential impact on shareholder value and corporate governance standards., as related article

The Dilution Dilemma: Calculating the Real Cost

At the heart of Glass Lewis’s opposition lies what the firm characterizes as “excessive dilution” of existing shareholders’ stakes. The advisory firm estimates that if fully exercised, the compensation package could reduce current shareholders’ ownership by approximately 11.3% – a substantial erosion of value that the report suggests warrants “significant shareholder concern.”

Perhaps more striking is the valuation gap between Tesla’s own estimates and Glass Lewis’s calculations. While Tesla values the package at $87.8 billion, Glass Lewis puts the figure at $141.6 billion, highlighting the complexity of valuing such an unprecedented compensation structure. The firm emphasizes that Musk could receive “billions in compensation and a materially increased ownership stake” even if he achieves only one of the 12 performance tranches., according to recent studies

Governance Concerns Resurface

The Glass Lewis report resurrects governance questions that previously led to the invalidation of Musk’s 2018 compensation package. The firm points to what it describes as longstanding concerns about board independence, noting that directors reviewing Musk’s compensation have “personal or professional ties to him that date back years.”

These relationships were central to a Delaware court ruling earlier this year that struck down the previous pay package, with the court finding that the connections compromised the approval process. Glass Lewis argues that these governance issues remain unresolved and relevant to the current proposal, suggesting that the board structure may not provide adequate oversight for such a monumental compensation decision., according to recent research

Performance Thresholds Under Scrutiny

Glass Lewis raises questions about the structure of the performance milestones themselves, suggesting that the early targets “do not appear as herculean as the size of the proposed tranches would suggest.” This implies that Musk could unlock massive compensation without delivering the extraordinary performance the package ostensibly demands., according to recent developments

The compensation plan ties Musk’s award to both market capitalization targets and operational milestones, including achieving a $8.5 trillion valuation by 2035. However, critics question whether hitting initial targets would necessarily require the kind of outlier performance that might justify such an unprecedented reward.

Tesla’s Fiery Response

Tesla has responded to the criticism with characteristic defiance, taking to social media platform X to blast both ISS and Glass Lewis as “misguided.” The company’s post accused the advisory firms of having “recommended against Tesla’s proposals time and time again since the 2018 CEO Performance Award was introduced.”

In a pointed rebuttal, Tesla reminded shareholders that those who ignored previous recommendations from these firms “may have missed out on our market capitalization soaring by 20x from March 2018 to August 2025.” The company characterized the advisors’ approach as using “one-size-fits-all checklists” that “undermine shareholders’ interests” and ignore “the staggering financial results delivered under Elon’s leadership.”

The Focus Factor: Musk’s Multiple Ventures

Another concern highlighted in the Glass Lewis analysis involves Musk’s attention across his numerous ventures. The report questions whether adequate controls exist to ensure Musk maintains sufficient focus on Tesla given his commitments to SpaceX, xAI, X (formerly Twitter), and Neuralink.

This concern takes on added significance given the compensation package’s structure, which could reward Musk handsomely even for partial achievement of targets. As Glass Lewis notes, “The size of the award could result in the scenario where Mr. E. Musk receives billions in compensation and a materially increased ownership stake, even if only a single tranche is earned.”

Industry Support and Opposition

Despite the mounting institutional opposition, Tesla retains support from influential backers. Cathie Wood, founder of ARK Invest and a longtime Tesla supporter, predicted the plan would still pass “decisively” despite objections from proxy firms and index funds.

Wood launched a broader critique of the opposition, accusing index funds of doing “no fundamental research” and characterizing index-based investing as “a form of socialism.” Her comments highlight the philosophical divide between Tesla’s growth-oriented supporters and more traditional governance advocates.

The Stakes for Corporate America

The outcome of the November 6 vote will have implications far beyond Tesla’s corporate headquarters. A approval would set a new benchmark for executive compensation and potentially reshape governance standards across the technology sector and beyond. Conversely, a rejection would represent a significant victory for governance advocates and could signal growing shareholder pushback against what some perceive as excessive compensation packages.

As shareholders weigh their decision, they must balance recognition of Musk’s transformative leadership against concerns about dilution, governance, and the precedent-setting nature of the proposed compensation. The result will not only determine Musk’s personal wealth but also send a powerful message about the evolving relationship between visionary founders and their shareholders in modern corporate America.