As Tesla’s annual general meeting (AGM) approaches on November 6, 2025, the world’s most valuable electric vehicle manufacturer finds itself at the epicenter of a storm over corporate governance, executive pay, and the future direction of one of America’s most iconic companies. At the heart of the controversy is a proposed $1 trillion compensation package for CEO Elon Musk—by far the largest in corporate history—and a series of related governance proposals that have sparked passionate debate among investors, unions, advocacy groups, and the broader public.
The drama has been building since September, when Tesla’s board unveiled a new stock award for Musk. The deal, worth up to $1 trillion, is tied to ambitious milestones: an $8.5 trillion market capitalization and the delivery of tens of thousands of robotaxis. A separate proposal would create a special share reserve of 208 million shares—valued at $92 billion—to be given to Musk with no strings attached. Both proposals are up for a shareholder vote at the upcoming AGM.
According to Electrek, these awards would see Musk’s compensation soar to levels more than 2,000 times that of Jensen Huang, CEO of NVIDIA, whose $50 million 2024 pay package now seems modest by comparison. To put the numbers in perspective, a median Tesla employee would need to work for 1.7 million years to match Musk’s projected annual compensation under the plan.
The scale and structure of these proposals have alarmed not only individual investors but also major institutional shareholders, public pension funds, and advisory firms. Both ISS and Glass Lewis, the two largest proxy advisory groups, have recommended shareholders vote against the pay package, describing it as “astronomical” and raising red flags about the board’s independence and oversight. Their opposition is echoed by groups like the Shareholder Rights Group and SOC Investment Group, who have called for stronger corporate governance and more accountability at the top.
But perhaps the most vocal opposition comes from a new coalition called Take Back Tesla. Led by unions such as the American Federation of Teachers (AFT) and the Communication Workers of America—and joined by public interest organizations like Public Citizen, Stop the Money Pipeline, Americans for Financial Reform, Ekō, and People’s Action Institute—the campaign is urging individuals to contact their pension and retirement fund managers and demand a “no” vote on Musk’s pay. These groups argue that the proposals not only threaten shareholder value but also exacerbate income inequality and undermine the interests of ordinary workers and retirees whose pensions are invested in Tesla stock.
Randi Weingarten, president of the AFT, did not mince words: “The Tesla board, instead of upholding basic governance standards, wants to green light an outrageous $1 trillion pay package for a CEO who has spent most of the year engaged in childish political brawls, rather than working to create shareholder value. To reward this destructive behavior with an obscene salary is a slap in the face—not only to the federal workers he’s fired, but to the retirees whose pensions are invested in Tesla stock. We urge shareholders to join with us and demand their state pension officials reject Musk’s money grab and confiscate the Tesla board’s rubber stamp.”
At the core of the accountability debate is the board’s response to a 2018 $56 billion compensation award for Musk, which was recently invalidated by a Delaware court. Instead of backing down, the board doubled down. On August 4, 2025, Tesla’s directors approved a $29 billion “interim equity grant” to Musk—without a shareholder vote. Structured to avoid being reported as an expense under accounting rules, the grant was pitched as a “good faith payment” to keep Musk engaged, even as the legality of his previous award remains in limbo. Critics, including Mary Cerulli of Climate Finance Action writing in ImpactAlpha, say this maneuver raises serious questions about the board’s fiduciary duty and transparency.
The new $1 trillion award is even more ambitious, requiring Musk to create roughly $7.5 trillion in additional market capitalization for Tesla shareholders. If the Delaware Supreme Court eventually restores the 2018 pay package, Musk is expected to forfeit the interim award to avoid double compensation—a detail that highlights the tangled web of legal and financial engineering at play.
The independence of Tesla’s board is under intense scrutiny. Shareholders are being asked to re-elect directors Ira Ehrenpreis, Joe Gebbia, and Kathleen Wilson-Thompson, all of whom face opposition due to their perceived closeness to Musk. Board Chair Robyn Denholm, who played a central role in approving the interim grant, has herself received significant compensation during her tenure, further fueling concerns about the board’s willingness to challenge Musk’s authority.
Beyond pay, there are broader questions about Musk’s focus and the allocation of Tesla’s resources. With Musk simultaneously running SpaceX, Neuralink, X Corp., and xAI, some investors worry that Tesla’s best talent and assets are being diverted to benefit the CEO’s private ventures. A shareholder proposal (No. 7) at the AGM calls for explicit board authorization before any investment in xAI, reflecting growing unease about corporate priorities.
Other shareholder proposals aim to reform Tesla’s governance more fundamentally. Proposal 12 seeks annual elections for every director, enhancing accountability. Proposal 13 would remove the supermajority voting requirement for major decisions, making it easier for shareholders to influence company policy. Proposal 10 aims to repeal the 3% ownership threshold required to bring derivative suits, which currently limits legal recourse to only the largest institutional investors.
The company’s legal domicile has also become a flashpoint. In 2024, Tesla moved its headquarters from Delaware to Texas, a move widely seen as an attempt to seek a more favorable judicial environment after the Delaware Chancery Court’s critical Tornetta decision. Critics argue this is an effort to avoid the rigorous oversight Delaware is known for, further eroding shareholder protections.
Meanwhile, Musk’s own political activities have added fuel to the fire. According to Electrek, he donated $288 million to a political effort that opposes electric vehicles and supports fossil fuel interests—actions that seem at odds with Tesla’s mission and have alienated some of the company’s traditional supporters, including climate advocates and unions.
As the November vote looms, advocacy groups and public financial officers are mobilizing across the country to educate trustees, union members, and state officials about the risks of excessive executive pay and weak corporate governance. Climate Finance Action, for example, is working to ensure pension trustees are equipped to vote in line with sound governance principles and protect long-term shareholder value.
With stakes this high, the outcome of Tesla’s AGM may set a precedent for executive accountability and corporate democracy far beyond Silicon Valley. Whether shareholders will rein in Musk’s power or green-light his record-breaking pay package remains to be seen, but one thing’s clear: the era of passive ownership at Tesla is over.
