Not all of Tesla’s investors are on board with CEO Elon Musk’s $1 trillion pay package.
In a letter sent on Thursday, a group of unions, state treasurers, and institutional investors urged Tesla shareholders not to vote for the mammoth pay deal.
The investor group includes SOC Investment Group, the American Federation of Teachers, and Brad Lander, the New York City Comptroller, who have all previously criticized Tesla’s board.
Their letter attacks the EV giant’s governing body as insufficiently independent from Musk, and says that the performance goals of the billionaire’s compensation package are vague and not as demanding as they initially appear.
Tesla unveiled the proposed $1 trillion pay package last month, and shareholders will vote on whether to approve it at the company’s general meeting in November.
For Musk to access the full payout, he needs to grow Tesla’s market cap to $8.5 trillion over the next decade and hit a series of ambitious product milestones.
These include boosting annual earnings to $400 billion a year, building a million Optimus robots, and delivering around 12 million EVs by 2035 — an average of 1.2 million a year, which the letter points out is well below the total Tesla sold in 2024.
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The shareholder group criticized Tesla’s board for not securing a commitment from Musk, who runs multiple companies, to “devote his attention” to Tesla, and warned that the pay package could lead to share dilution for Tesla shareholders.
The letter also pointed to the EV giant’s volatile performance, with sales and revenue both slumping in the first half of the year amid rising competition and backlash over Musk’s political activities.
Tesla’s sales bounced back in a big way in the third quarter, with the company announcing record quarterly deliveries on Thursday.
Tesla’s board responded to some of the points raised by the investors in a post on X, arguing that the compensation package creates trillions of dollars of value for shareholders and will accelerate global prosperity.
“If Elon Musk doesn’t deliver results, he receives nothing,” the company said.
