Elon Musk, the enigmatic CEO of Tesla, is once again at the center of a firestorm as shareholders prepare to vote on a proposed $1 trillion compensation plan—an eye-popping sum that would be the largest CEO pay package ever granted by a public company. The showdown, set for Tesla’s annual meeting on November 6, 2025, has ignited fierce debate among investors, proxy advisers, politicians, and corporate governance experts, all weighing in on what’s at stake for the future of the electric car giant.
The controversy erupted after Institutional Shareholder Services (ISS), one of the world’s most influential proxy advisory firms, issued a strongly worded recommendation urging Tesla investors to reject Musk’s unprecedented pay package. According to ISS, the “mega performance equity award” carries an “astronomical grant value conditioned upon far-reaching performance targets that, if achieved, would create enormous value for shareholders.” Yet ISS warned that the sheer magnitude and structure of the deal raise “unmitigated concerns” about corporate oversight and shareholder protections, as reported by CNBC and the New York Post.
At the heart of the plan is a proposal to grant Musk hundreds of millions of Tesla shares over the next decade, contingent on achieving aggressive milestones—most notably, Tesla reaching a staggering $8.5 trillion market capitalization. If the targets are met, Musk’s stake in Tesla could rise by 12% (or even up to 13.5%, according to some analyses), giving him a commanding margin of voting power and, critics say, potentially entrenching his control over the company for years to come.
The ISS recommendation is not the only headwind Musk faces. Other major investors and coalitions, including the SOC Investment Group and state treasurers from Nevada, New Mexico, and Connecticut, have publicly urged shareholders to oppose both the pay package and the re-election of certain board members. In their view, the board’s “fixation on retaining Musk” is delaying much-needed accountability and oversight at the top of Tesla’s leadership structure.
“This is not just about compensation—it’s about consolidating control,” warned one corporate governance analyst, echoing a sentiment that’s been gaining traction among shareholder advocacy groups. The structure of the grant, with its possibility of partial payouts even if only some targets are met, has been described as a “de facto power grab.” The memory of Musk’s previous pay package, valued at $56 billion and struck down by a Delaware court in 2024 for lacking fairness and board independence, looms large over the current debate.
The legal backdrop is a critical part of the story. In 2024, a Delaware court invalidated Musk’s earlier $56 billion compensation deal from 2018, finding that the Tesla board had improperly granted the award and withheld key details from shareholders. Tesla has appealed that ruling to the Delaware Supreme Court, with oral arguments taking place just this month, adding further uncertainty to the outcome of the compensation saga.
In response to ISS’s negative guidance and mounting criticism, Tesla’s board, led by Chair Robyn Denholm, has gone on the offensive. The board argues that Musk’s vision and leadership have been instrumental in Tesla’s meteoric rise and that the new compensation package is tightly linked to performance. “Elon receives nothing unless shareholders win big,” Tesla declared in a post on X (formerly Twitter), pushing back on ISS’s assessment and accusing the advisory firm of “missing fundamental points of investing and governance.”
Denholm has urged shareholders to support the board’s recommendations on all 2025 proxy proposals, insisting that the plan aligns Musk’s incentives with shareholder returns and ensures his continued commitment to Tesla, especially as he juggles other ventures like SpaceX and X. According to Tesla’s official filings, Musk will receive no cash salary or bonus—his rewards are entirely dependent on hitting ambitious value-creation goals. “If the metrics aren’t met, Musk literally earns nothing,” the board has emphasized.
The debate has spilled over into the political arena as well. Senator Bernie Sanders (I-Vt.), a long-time critic of excessive executive compensation, lambasted the proposal, calling it “insane” and warning that it could make Musk wealthier than “the bottom 59% of Americans combined.” On the other side, Musk’s supporters, including venture capitalist Chamath Palihapitiya, argue that such a performance-based package is justified given Tesla’s global innovation and the scale of Musk’s contributions to the company’s success.
As the November 6 vote approaches, the investor community is deeply divided. Some long-term Tesla loyalists believe Musk’s leadership warrants such a bold reward, pointing to the company’s robust performance across short, medium, and long-term timeframes, as highlighted by Benzinga’s Edge Stock Rankings. Others, including asset managers and state officials, worry the plan could undermine corporate governance and set a dangerous precedent for executive pay at public companies.
Adding to the complexity is Tesla’s unique shareholder base, which includes a large number of retail investors. This makes the outcome of the vote especially unpredictable, as turnout and persuasion efforts by both sides could tip the scales. Institutional investors, such as pension and mutual funds, are expected to be influenced by ISS’s recommendation, but the final decision may rest with the broader community of individual shareholders.
The stakes are high. If shareholders reject the proposal, it would mark a rare public rebuke of Musk and force Tesla’s board to return to the drawing board to craft a new compensation scheme—potentially with stricter oversight and more conventional safeguards. If the plan is approved, however, it could fundamentally reshape the balance of power at Tesla, cementing Musk’s influence for the next decade and sending a powerful signal about how much value the market places on visionary leadership (and, perhaps, on risk-taking at the highest levels).
In the midst of the uproar, one thing is clear: the outcome of this vote will reverberate far beyond Tesla’s boardroom, raising questions about the future of executive compensation, corporate governance, and the role of charismatic leaders in shaping the destiny of the world’s most valuable companies. As November 6 approaches, investors, analysts, and ordinary shareholders alike are watching closely—wondering what kind of precedent Tesla, and Elon Musk, will set for the next generation of business titans.
