Tesla’s record-shattering $1 trillion pay proposal for CEO Elon Musk is hitting turbulence as influential proxy adviser ISS has urged shareholders to vote it down, calling it an “extraordinarily high” package that could limit the board’s flexibility for years to come.
This marks the second consecutive year ISS has recommended against Musk’s compensation plan. Its guidance often sways major institutional investors, including large passive funds holding Tesla stock. The advisory comes ahead of Tesla’s high-stakes November 6 shareholder meeting and follows a Delaware court’s earlier rejection of Musk’s $56 billion pay arrangement.
Even if Musk falls short of the ambitious targets set in the plan, he could still walk away with tens of billions of dollars thanks to the structure that rewards partial achievements and the company’s soaring stock price.
The board unveiled the package last month, touting it as the largest corporate pay plan in history, designed to align with Musk’s vision and secure his long-term leadership. ISS, however, warns it locks in massive payouts over the next decade while curbing the board’s ability to adjust future compensation.
Tesla shares climbed after the announcement, reflecting investor optimism that the package will motivate Musk to stay focused on long-term company goals. Board director Kathleen Wilson-Thompson emphasized that retaining Musk also helps attract and retain top talent.
Unlike his 2018 pay deal, Musk can now vote his shares, giving him roughly 13.5% of Tesla’s voting power—potentially enough to push the plan through. ISS criticized the proposal’s sheer size, the generous partial-achievement rewards, and the potential dilution for current shareholders. Tesla, in response, dismissed ISS’s concerns, calling them out of touch with governance realities.
ISS values the stock-based award at $104 billion, higher than Tesla’s own $87.8 billion estimate. Vesting is tied to formidable milestones, including an $8.5 trillion market cap, delivery of 20 million vehicles, a million robotaxis, and $400 billion in adjusted core earnings.
The advisory firm’s warning on Musk’s compensation was part of a broader slate of voting recommendations released Friday, sending a clear message: even the boldest corporate pay plans can’t escape scrutiny.
