ISS Urges Shareholders to Reject Elon Musk’s $1 Trillion Tesla Pay Package
Tesla’s proposed $1 trillion compensation plan for CEO Elon Musk is drawing fresh criticism after leading proxy adviser Institutional Shareholder Services (ISS) urged investors to vote against the record-breaking deal. If approved, it would be the largest CEO pay package in corporate history.
This marks the second straight year that ISS has advised Tesla shareholders to reject a pay plan for Musk. The firm’s recommendations often influence major institutional investors and passive funds that hold significant stakes in Tesla.
Pressure Mounts Ahead of Key November Vote
The ISS report adds pressure on Tesla’s board of directors ahead of a crucial shareholder meeting on November 6. The move also renews debate around Musk’s compensation after a Delaware court previously struck down his $56 billion pay plan.
Under the new proposal, Musk could still earn tens of billions of dollars even if he fails to meet all performance goals, thanks to a structure that rewards partial achievement and benefits from rising Tesla share prices.
The World’s Largest Corporate Pay Plan
Last month, Tesla’s board presented the $1 trillion package as a long-term incentive plan, calling it a way to retain Musk’s leadership and drive strategic growth. The deal sets aggressive performance targets, including:
- $8.5 trillion in market capitalization
- 20 million vehicle deliveries
- 1 million robotaxis
- $400 billion in adjusted core earnings
ISS criticized the plan, saying it “locks in extraordinarily high pay opportunities” over the next decade and limits the board’s flexibility to adjust Musk’s future compensation.
Investor Reactions and Board Defense
Tesla’s stock rose after the announcement, as some investors viewed the plan as motivation for Musk to stay focused on the company’s long-term strategy.
“Many people come to Tesla to work directly with Elon,” said Director Kathleen Wilson-Thompson in a video posted on Tesla’s X account. “Retaining and incentivizing him helps us attract top talent.”
Unlike the 2018 pay plan, Musk will be allowed to vote his shares this time, giving him roughly 13.5% voting power — a stake that could be enough to ensure approval.
ISS Flags “Astronomical” Payout Risks
The proxy adviser highlighted concerns over the “astronomical” size of the award, its high payout potential for partial targets, and share dilution risks for existing investors. ISS valued the stock-based grant at $104 billion, exceeding Tesla’s own estimate of $87.8 billion.
Tesla has not yet commented on the ISS report. The advisory firm’s guidance was part of a broader set of voting recommendations issued on Friday.
