Elon Musk Pleads with Tesla Investors to Approve His $1 Trillion Pay Package, Slams Advisory Firms ISS and Glass Lewis
Introduction
When you hear the phrase “$1 trillion compensation package”, you may pause. That’s not a typo. And for Elon Musk and Tesla, this figure represents far more than mere money—it’s about control, vision and the future of the company.
Recently, Musk took the unusual step of hijacking the company’s earnings call to plead directly with shareholders to approve his proposed pay plan—and launched a blistering attack on the major advisory firms that are encouraging investors to reject it.
In this article we’ll explore:
· What exactly the package entails and how it works.
· Why Musk and Tesla believe it is justified.
· Why major advisory firms believe it is not.
· The tension between innovation, governance and shareholder rights that this debate reveals.
· What shareholders (including international ones) might ask themselves in the lead-up to the vote.
What is at sake: the size and structure of the package
At the heart of this debate lies a package proposed by Tesla’s board for Musk valued at up to US $1 trillion—if certain very ambitious performance milestones are met.
Milestones & voting power
Here are key details:
· The deal is structured as massive stock awards, contingent on Tesla hitting a set of operational and market targets over a number of years.
· The package would increase Musk’s stake in Tesla from around 13 % to nearly 29 % if all triggers are met.
· A big part of Musk’s argument: this is less about the cash, more about voting control—ensuring he has enough influence to steer Tesla’s future, especially through its next-stage bets (AI, robotaxis, humanoid robots). As he put it:
“There needs to be enough voting control to give a strong influence, but not so much that I can’t be fired if I go insane.”
· Tesla’s board and Musk argue that if the package is rejected, Musk may reduce his involvement—or move on—threatening the continuity of the company’s strategy.
Why is it so large?
The scale here is unprecedented. Some of the performance targets include:
· Reaching a market value of around US $8.5 trillion. Selling perhaps millions of vehicles, deploying robotaxi fleets, producing humanoid robots, achieving huge earnings growth.
·
The logic from Tesla: you need big incentives to match big ambitions.
Musk and Tesla’s case: innovation, key-man risk and control
From Musk’s perspective—and that of his supporters—several arguments support the package.
1. Vision & leadership continuity
Musk argues that his role at Tesla is not easily replaceable. He heads one of the world’s most transformative companies, with operations spanning electric vehicles (EVs), energy storage, autonomous driving, AI and robotics. The “key-man risk” is real: the success of Tesla, in many views, depends on Musk’s drive, ideas and hands-on leadership.
His message: giving him enough control now ensures that the strategic continuity remains intact, so the company can deliver on its moonshots.
2. Voting control is about more than pay
Musk emphasized during the earnings call that his compensation is not simply about the money. He wants to ensure influence—that isn’t undermined by external advisers or large passive funds that follow proxy-advisory firms’ recommendations without deep engagement.
His words:
“I just don’t feel comfortable building a robot army here, and then being ousted because of some asinine recommendations from ISS and Glass Lewis.”
In other words: if you’re going to invest in a long-term transformational enterprise, you want the leader to have the latitude to act boldly without being hamstrung by short-term votes or external bureaucracies.
3. Rewarding performance, not just time served
Tesla’s board argues that Musk’s incentives are tied to performance—and if the targets aren’t met, he gets nothing (or much less). That helps align his pay with the company’s long-term success, they say.
They also argue that rejecting the plan could signal to Musk (and the market) that the company does not value his vision—or worse, that his role is precarious—potentially destabilizing the enterprise.
The opposing viewpoint: advisory firms, governance & shareholder dilution
On the flip side, major proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis have raised serious concerns.
Key concerns:
Excessive size and dilution
One major worry: a US $1 trillion potential payout is astronomically large and unprecedented. The scale alone raises red flags. ISS has described the plan as creating “unmitigated concerns” due to its size and structure.
Dilution is another: issuance of new shares to Musk at this scale could reduce the value for existing shareholders, especially if many milestones are met or waived. Glass Lewis flagged the risk of “astronomical” dilution and noted the potential for the board to grant awards even if original targets are not met (through substitution events).
Concentration of power & key-man risk
Opponents argue that giving Musk near-29 % control (and increased voting power) means he holds outsized influence, which raises concerns about checks and balances.
Glass Lewis warned that Tesla is essentially handing over future strategy to Musk, while simultaneously reducing the mechanisms that hold him accountable.
In effect: if Musk fails, shareholders bear the risk; yet his reward leans asymmetrically to the upside.
Weak guardrails and board oversight
Another point: ISS and Glass Lewis argue that the structure gives the board less ability to adjust or renegotiate future pay levels, reduces oversight, and doesn’t sufficiently guard against poor performance or failure to deliver.
For example, ISS noted the board’s ability to meaningfully adjust future pay is constrained.
Proxy advisory-firms’ role
Beyond the specifics of the pay plan, critics argue about how governance works in practice. Musk and supporters say that passive index funds follow proxy-advisory firms like ISS and Glass Lewis almost automatically, and those firms have too much influence without skin-in-the-game.
On the other hand, those advisory firms argue that their job is precisely to hold boards and management to account—to protect shareholder interests. They believe the current plan fails that test.
The tug-of-war: innovation ambition vs. governance discipline
What we’re seeing is not simply a disagreement about one CEO’s compensation. It’s a deeper conflict at the intersection of ambition and accountability.
Innovation demands freedom
Companies like Tesla, which sit at the cutting edge of technology, often require bold bets, long timelines and leaders who can act decisively. Musk’s supporters argue that traditional corporate governance models—slow, cautious, highly regulated—may hamper transformational companies. From their viewpoint, giving Musk the influence and incentive to pursue moon-shots (robotics, AI, autonomous driving, energy) is necessary.
But governance demands checks
At the same time, shareholders entrust boards and governance mechanisms precisely because management might overreach, underdeliver or pursue self-interest.
When one person holds outsized power and reward, the risk to other stakeholders increases. Dilution, mis-aligned incentives, weak board oversight and concentration of voting power are all governance red flags.
It’s a balancing act
Hence the tension:
· If you favour innovation and believe Musk is unique and irreplaceable, you might side with the board and Musk’s pitch.
· If you emphasise shareholder protections, equal treatment of investors, and independent oversight, you might side with the advisory firms.
How this plays out at Tesla will likely have wider implications for how executive pay, control and innovation are treated at other public companies.
The investor vote and what it means
The shareholders of Tesla will vote on the package at the annual meeting. Key players and context:
· The vote has been scheduled for November 6, 2025 (according to several reports) for Tesla’s pay package.
· Musk and Tesla board are actively lobbying shareholders to approve the plan, arguing continuity and vision.
· Advisory firms ISS and Glass Lewis have recommended shareholders vote no on key proposals tied to the package.
· Some supporters (e.g., Cathie Wood of ARK Invest) believe the package will pass decisively.
For shareholders — questions to ask
If you hold (or are thinking about) Tesla stock, these are some of the questions you might ask yourself:
· Is Musk’s vision realistic? The targets set are tremendously ambitious. What’s the likelihood Tesla achieves them?
· What happens if the targets fail? If Musk doesn’t hit them, does he still benefit? What protections do shareholders have?
· How will dilution affect me? If new shares are issued to Musk, will my ownership or voting power be meaningfully diluted?
· Who controls the board? Is the board sufficiently independent to hold Musk accountable and protect shareholder interests?
· What is the value of Musk’s involvement? If Musk left or reduced his role, what would happen to Tesla’s prospects? Is this genuine “key-man” risk?
· Voting power and control: Are you comfortable with the likely increase in Musk’s influence over Tesla’s future—especially in emerging fields like AI and robotics?
· Proxy advisory influence: How much weight do you put on the recommendations of ISS or Glass Lewis? Are their analyses aligned with your view of shareholder value or broader governance principles?
The broader implications: pay culture, corporate governance and precedent
The Tesla-Musk case is likely to set precedent on multiple fronts.
Executive pay culture
· We are witnessing what may be the largest compensation deal ever proposed for a CEO at a publicly traded company.
· It raises the question: at what point does incentivizing innovation become excessive reward?
· It also raises concerns about pay-for-performance and whether large pay packages genuinely align with shareholder returns—or simply reward growth that may or may not materialize. Governance scholars long note that higher pay does not always translate into better performance.
Shareholder rights & dilution
· Shareholders are increasingly concerned about dilution and fairness. When massive share awards are proposed, existing owners can feel disadvantaged.
· The case highlights how large companies might centralize power and reduce effective oversight, particularly when a dominant CEO is involved.
Role of proxy-advisory firms
· The battle between Musk and the advisory firms raises a question about the influence of firms like ISS and Glass Lewis. Are they too powerful? Do they hold enough accountability? Musk himself called them “corporate terrorists.”
· For investors, the question is: should passive investors rely on these firms? Or should they do independent analysis?
Innovation vs. governance trade-off
· The Tesla story shows the tension companies face between enabling bold visionary leadership and maintaining checks & balances.
· For those managing portfolios or studying corporate governance, this case will be cited as a major reference point.
Risks and criticisms: what could go wrong
While Tesla and Musk make a strong case, risks abound. Some of them include:
· Failure to meet milestones – If Tesla fails to achieve the ambitious targets, the package might accrue no value—but the ambition and cost to shareholders may still have been significant.
· Distraction risk – Musk’s involvement spans multiple ventures (Tesla, SpaceX, xAI, etc.). If his attention is divided, Tesla may underperform or face strategic drift. Advisory firms point to this as a concern.
· Dilution of shareholder value – Large share issuance may erode value for existing shareholders, particularly if growth slows or targets are missed.
· Control concentration – If Musk gains nearly 29 % stake and broad voting power, future board independence may be compromised. That could reduce oversight and increase risk of management decisions misaligned with minority shareholders.
· Guardrails weakening – If the board cannot meaningfully adjust future pay, or if performance targets become outdated or easy to meet (or waived), then the alignment between pay and performance can degrade.
· Reputational & regulatory risk – Such a massive package may spark backlash, regulatory scrutiny or activism; the optics of one person potentially earning US $1 trillion will attract attention—not always favourable.
The communication strategy: how Musk and Tesla made their case
An important part of this story is not just the numbers, but the narrative and tactics.
· Musk chose to intervene directly on the company’s earnings call—something unusual for a CEO seeking shareholder approval of his own pay. His tone was direct, even combative calling out advisory firms by name.
· Tesla’s board and CFO joined the narrative, urging shareholders to support the proposals—reinforcing that the company sees Musk as integral to its future.
· The company also emphasised that the compensation is conditional and linked to extreme performance, not simply a guaranteed windfall. This helps their narrative that Musk’s incentive is aligned with long-term value.
· Musk’s language tapped into broader concerns of big-tech disruption, ambition, and existential risk in the EV / AI / robotics space—framing the compensation as part of a grander mission.
· On the other side, advisory firms have published dissenting reports, warning shareholders and encouraging them to vote ‘no’. Their disclosures emphasise governance risks, dilution, and accountability concerns.
What this means for Indian or global investors
For investors in India (or elsewhere) who hold or are considering Tesla (TSLA) exposure (via ADRs or indirectly), a few take-aways:
· Global governance matters: Even though Tesla is a U.S. company, issues such as board oversight, dilution, voting power and executive incentives affect all shareholders globally.
· Proxy votes affect outcomes: Advisory firm recommendations still matter; many asset-managers follow them. If they recommend against, and if large institutional investors follow, the vote could be tight.
· Diversification & risk: If you believe in Tesla’s vision but are concerned about this governance risk, it may argue for moderated exposure in your portfolio.
· Watch the vote outcome and disclosure: The results of the shareholder meeting will send signals—not just about Tesla, but about how boards reward top executives, especially in disruptive industries.
· Future precedent: If this pay package passes, it might encourage other companies to propose ever-bigger compensation packages for visionary CEOs—raising governance alarms across markets.
What to watch next
As this story develops, here are key things to monitor:
· Vote outcome: How many shares vote for vs. against, and how active institutional investors are.
· Detailed disclosures: Especially regarding any modifications to the plan, how the board frames the performance targets, and what guardrails are in place.
· Tesla’s performance: Are the milestones achieved? Are they realistic? How is Tesla performing on vehicle production, robotics, AI initiatives and earnings?
· Regulatory or legal developments: Large pay packages can attract scrutiny. Previously, Tesla’s 2018 plan was overturned by a Delaware court.
· Investor sentiment and proxy advisory behaviour: Will advisory firms double-down on governance critiques? Will shareholders pay more attention to executive pay and control issues?
· Broader market impact: Will other companies reference Tesla’s deal when designing their own executive compensation programs? Will governance best practices evolve in response?
Conclusion
Elon Musk’s plea to Tesla investors and his challenge to the shareholder advisory firms represent more than just one executive’s compensation battle. It is a microcosm of the ongoing debate between visionary leadership and corporate governance discipline.
On one side sits a company attempting to reshape transportation, energy, robotics and AI—and its leader arguing that he needs the tools, incentives and freedom to do so. On the other stands the principle that shareholders are owners too, and they deserve fairness, transparency and governance mechanisms that protect their interests.
As investors, analysts and governance watchers look on, the Tesla showdown is setting a precedent. Will the ambitious pay package be approved? Will it deliver value commensurate with the risk and dilution? Or will this become a cautionary tale of governance gone awry?
Regardless of the outcome, one thing is clear: the convergence of hyper-growth companies, charismatic founders, and modern shareholder expectations will continue to shape the future of corporate governance—and the Tesla vote may well become a landmark in that evolution.
FAQs
1. What is Elon Musk’s $1 trillion Tesla pay package?
Elon Musk’s $1 trillion pay package is a performance-based compensation plan that could grant him massive stock options if Tesla hits ambitious targets related to market capitalization, revenue, and innovation milestones.
2. Why is Elon Musk asking Tesla investors to approve the package?
Musk believes the plan is essential for maintaining his voting control and ensuring Tesla’s long-term vision in AI, robotics, and autonomous technology remains intact.
3. Why are advisory firms opposing the pay deal?
Proxy advisory firms ISS and Glass Lewis recommend voting against the package, citing its enormous size, shareholder dilution risks, and concerns over Musk’s growing control over Tesla’s board and decisions.
4. How could this package affect Tesla shareholders?
If approved, Musk’s ownership stake could rise from 13% to about 29%, potentially diluting existing shareholders’ stakes. Supporters argue that it would align Musk’s incentives with Tesla’s growth.
5. What happens if shareholders reject the pay plan?
If the plan is rejected, Musk may reconsider his involvement in Tesla’s long-term projects, raising uncertainty about leadership continuity and future innovation.
6. How does this pay package compare to other CEO compensations?
Musk’s proposal dwarfs all other CEO pay deals in corporate history, setting a new record that could redefine executive compensation norms worldwide.
7. When will the shareholder vote take place?
Tesla shareholders are expected to vote on the $1 trillion pay package during the upcoming 2025 annual general meeting, with advisory firms already urging a “no” vote.
8. What does this controversy mean for Tesla’s future?
The outcome will shape Tesla’s corporate governance model and could set a precedent for how visionary CEOs are compensated in high-growth tech companies.
9. What are Musk’s main criticisms of advisory firms?
Musk accused ISS and Glass Lewis of acting as “corporate terrorists,” claiming they prioritize bureaucracy over innovation and hinder visionary leadership.
10. How are investors reacting to Musk’s plea?
Investor reactions are divided—some see the package as fair given Musk’s role in Tesla’s success, while others worry it concentrates too much power and undermines governance safeguards.
