Tesla faces one of the most pivotal decisions in its history. As the annual general meeting approaches, the company has launched a high-profile campaign urging shareholders to approve a potential $1 trillion pay package for its CEO, Elon Musk. Digital ads champion Musk’s leadership, while the website Votetesla.com shows board chair Robyn Denholm and director Kathleen Wilson-Thompson praising him to a swelling soundtrack of triumph. But not all investors are convinced. The meeting in Austin, Texas, could turn into a referendum on Musk himself. His political statements and unpredictable management style have divided both fans and critics. On his social media platform X, Musk has raised the stakes, claiming Tesla’s fate “could affect the future of civilization.” He’s also rallied support from allies such as Michael Dell, Ark Invest’s Cathie Wood, and his brother Kimbal, who serves on Tesla’s board. “There’s no one remotely close to my brother,” Kimbal said. Musk’s brief response: “Thanks bro ❤️.”
Investors question Tesla’s priorities
For some shareholders, the debate over Musk’s massive pay reflects a deeper identity crisis at Tesla. The company has seen its car sales soften, while Musk’s focus has shifted to new ventures and political commentary. “It’s astonishing that a company struggling to sell cars spends money to promote a pay package,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management. Once a major Tesla supporter, Gerber has reduced his holdings. “Tesla must return to its mission—making and selling world-class EVs,” he said.
The trillion-dollar challenge
Musk’s proposed reward isn’t a simple trillion-dollar payout. It’s a performance plan tied to a massive leap in Tesla’s market value—from $1.4 trillion to $8.5 trillion. Musk must also oversee the rollout of one million “Robotaxi” vehicles, a key part of his self-driving car vision that has struggled to materialize. If he succeeds, he’ll receive 423.7 million new shares—worth about $1 trillion at the target valuation. Tesla has not commented on its campaign to win shareholder support.
This isn’t Musk’s first pay controversy. An earlier deal, worth tens of billions, rewarded him for boosting Tesla’s market value tenfold. Though he achieved that goal, a Delaware judge voided the plan in 2024, ruling that Tesla’s board was too close to him. The state’s Supreme Court is now reviewing that decision as Tesla pursues an even larger plan.
“Tesla is once again rewriting the corporate playbook,” said Columbia Law professor Dorothy Lund. “But that doesn’t mean it’s good governance.” She noted that such large-scale shareholder campaigns are usually launched to fend off activist investors, not to push through executive pay deals. “I’ve never seen anything like this over a compensation package,” she added.
Elon and Kimbal Musk will both vote on the proposal, giving them a significant edge. Musk, already the world’s richest man, became the first known half-trillionaire earlier this year.
A board under scrutiny
Tesla’s board insists Musk is irreplaceable. In a video message, Wilson-Thompson said the board worked for seven months with legal and pay experts to design the package. The company argues that Musk “uniquely possesses the leadership qualities needed to achieve Tesla’s long-term mission.” During Tesla’s latest earnings call, Musk downplayed the payout, saying the real issue was control—ensuring he has enough influence to steer the company’s future.
Critics say the board has gone too far. “The board’s duty is to protect shareholders, not campaign for the CEO,” said Yale professor Matthew Kotchen, who co-authored a study on how Musk’s actions have hurt Tesla’s image.
Institutional investors are also rejecting the proposal. Proxy advisers Glass Lewis and Institutional Shareholder Services (ISS) have urged shareholders to vote against it, calling the package excessive and damaging to shareholder value. Norway’s sovereign wealth fund—the world’s largest—and the U.S. pension giant CalPERS have both said no. New York State Comptroller Thomas DiNapoli has accused Tesla’s directors of failing to provide “independent oversight and accountability.”
The vote that could reshape Tesla
With major institutions opposed, Musk will rely on Tesla’s large base of retail investors. They’ve been fiercely loyal and could tip the balance in his favor. Morgan Stanley analyst Adam Jonas described the vote as “one of the most important moments in Tesla’s history,” warning that it could go either way.
Meanwhile, Musk continues to face criticism outside the boardroom. Protests have persisted since his brief and controversial role in Donald Trump’s administration earlier this year. “It’s hard to imagine Musk quickly undoing the damage to Tesla’s brand,” said Kotchen.
Still, many remain convinced of Musk’s unique influence. “He’s one of the few CEOs who can turn vision into reality,” said Jessica Caldwell, head of insights at Edmunds. “He’s polarizing, but his ability to inspire belief is unmatched.”
Now, the question is clear: will shareholders place a trillion-dollar bet on Musk’s vision—or decide it’s time for Tesla to take a different road?
