The battle over trillionaire Elon Musk’s pay package is escalating as pension funds square off against Tesla

Last year, Tesla mobilized thousands of small-family retail investors to vote their shares in favor of Musk’s billion-dollar payday. Now, Tesla is preparing retail owners for another vote on November 6 that would put Musk on the path to becoming the world’s first trillionaire by giving him up to 12% of Tesla’s outstanding shares divided into 12 tranches through a restricted stock grant. The first tranche starts at $2 trillion, and the last tranche is worth $8.5 trillion. If he achieves all the goals in the plan, he will bring Tesla to a market value of $8.5 trillion and his stake will be worth more than 1 trillion dollars. A lot of the rules of the game for 2025 are like 2024: savvy investor WebsiteA swarm From posts and share on X About how investors vote for stocks on specific brokerage platforms, and even Private video with Optimus Humanoid robots explain the vote between taking a sauna and supervising plates of bread and cream cheese.

Tesla’s annual meeting will be held on November 6 and we need your vote!

Voting is quick and easy – you can vote online, by post, via QR code or by phone@Tesla_Optimus I can show you how pic.twitter.com/OM5UwtkJWx— Tesla (@Tesla) October 6, 2025

Independent activist investor Michael Levin said Tesla is clearly devoting resources to communicating with its individual investors and informing them how to vote. luckHe said it is a difficult feat to achieve in the United States, and given the way Tesla succeeded last year, this year’s vote to approve Musk’s new award is not in doubt as it was in 2024. In addition, Tesla has the same rules of the game to work by this year.

“The 2024 result gives a very strong idea of ​​how 2025 will go, and this passed with the support of 72% of voters, which is very comforting,” Levin said. “This year, it’s kind of a version of the same thing: a corporate plan to go ahead and achieve these crazy, ambitious goals, and people are cool with that and don’t mind him becoming a billionaire.”

Thousands of retail and Tesla investors Loyalists They have pledged their support for Tesla and Musk’s new pay plan, but a growing coalition of pension funds and Democratic state fiduciaries are speaking out about what they see as red flags: a corporate package that is too large, a lack of independence on the board, and the possibility that other founders and controlling CEOs could follow in Musk’s footsteps. The latter would be disastrous for an economy that is already tilted very favorably in the direction of billionaires like Musk, while senior employees suffer from inflation and lackluster wage increases, the sources said.

“It’s not just the size, it’s the way the pay package is a ransom targeted at shareholders,” New York City Comptroller Brad Lander said. luck. “It’s a paranoid ride of bizarre proportions, all about Elon’s ego, not the financial health of the company or its stakeholders and shareholders.”

Lander, who signed A letter With other investors urging shareholders to vote against Musk’s pay plan and opposing the re-election of three Tesla board members, he oversees more than $1 billion invested in Tesla on behalf of New York City pension funds.

Likewise, New York State Comptroller Thomas P. DiNapoli, who oversees about $1.4 billion invested in Tesla on behalf of the state’s pension funds, Named Musk’s pay is “excessive,” which he said “dilutes the holdings of other shareholders and gives the captive board undue discretion.” DiNapoli said he plans in the coming weeks to pressure other investors to vote against the plan and all directors who have bids for re-election to the board.

The vote will be a pivotal moment — not just for Tesla, but for all those who oversee invested assets on behalf of shareholders and retirees. New Mexico State Treasurer Laura Montoya said luck.

“If we don’t hold them accountable, there will be a lot of others who will try to do the same,” Montoya said. “This is a precedent that could harm our economy, not only today and tomorrow but also the future of our children.”

Two compensation proposals at Tesla

The Tesla meeting agenda includes investor votes on 14 proposals, but the two proposals most closely tied to Musk’s compensation include a proposal to approve a 2025 CEO performance award, and a second proposal that includes creating a special reserve of 208 million shares of Musk stock. A vote allowing more shares would also replenish the pool of 60 million shares available to employees and directors that companies typically use to compensate executives.

“All the action is in these two proposals,” said Levin, who has a small investment in Tesla and plans to oppose the wage proposals.

The pay plan comes up for a vote this year after a Delaware judge Cancel Musk received the previous Moonshot award in January 2024, a decision that prompted Tesla to hold an investor vote on it Ratification His salary package for a second time in 2024 and to allow a move from incorporation in Delaware to Texas. The 2024 ratification vote and the move to Texas were massive victories for the electric car maker, although the same judge in Delaware struck down Musk’s pay package. The second time After the vote.

Since then, Tesla’s board of directors has given Musk a chance Temporary award With 96 million shares Restricted shares Its value is estimated at approximately $24 billion. Musk’s proposed 2025 prize involves the CEO achieving both market cap and operational targets that would likely see Tesla reach a market cap of $8.5 trillion if Musk pulls it off. It opens All slides 12. He would have to stay at Tesla for a minimum of 7.5 years and up to 10 years for his shares to vest.

Council He claimed During negotiations, Musk raised “the possibility that he may pursue other interests” if he is not paid for his previous work at Tesla and receives at least a 25% voting stake in the company. The new award requires him to “participate in the Board’s development of a framework for long-term CEO succession,” one of the terms states. Finally, Musk could become the world’s first trillionaire, and will own 28.8% of Tesla shares if he achieves all the goals in the “Moon” plan. He would also become the first and only CEO to achieve a remarkable hat-trick – three consecutive pay packages.

Tesla’s board of directors told investors that the pay package is key to keeping Musk focused on Tesla and motivated to grow the company.

“In light of the AI ​​talent wars, Tesla’s internal efforts to develop and expand its product offerings in the AI ​​industry, the absence of a comprehensive plan to address compensation that remains pending for Musk’s past performance, and the lack of any incentive going forward to motivate Musk to keep his focus on Tesla long enough to achieve meaningful results that would transform Tesla Longer term, we believe there is an urgent need to retain and incentivize Musk immediately,” the board told investors last month.

Pension funds are fighting back

In their criticism, pension funds and Democratic state fiduciaries are targeting not only the size of Musk’s potential pay package, but Tesla’s board of directors, headed by Robin Denholm. Pension leaders said Denholm and the board let investors down by failing to properly supervise Musk, challenge him when needed and ensure he remained focused on Tesla.

“In our view, the Board’s failure to limit Mr. Musk’s outside endeavors while rewarding him with unprecedented pay packages in exchange for only a part-time commitment strongly indicates a lack of true independence by management and puts long-term shareholder value at risk.” letter From SOC Investor The group was signed by dozens of fiduciaries and investors. “The board has allowed Mr. Musk to overcommit for years, allowing him to continue as CEO while taking on time-consuming leadership roles at his other companies,” xAI/X, SpaceXNeuralink and The Boring Company.

The level of compensation paid to Tesla board members could also compromise the impartiality of the board, the letter noted. The average corporate pay to S&P 500 board members in 2024 was $327,096, the letter said. Denholm’s annual compensation averaged $62 million. Denholm has done it again and again to reject Her objectivity has been influenced by the fortune she has made selling Tesla shares over the years.

However, some investors plan to send a message to the board by voting against the three directors up for re-election this year: Ira Ehrenpres, Joe Gebbia, and Kathleen Wilson Thompson.

Maryland Controller Brock Lerman said luck Its concerns about Tesla as a fiduciary were based on the board’s administrative record and lack of accountability by directors supervising Musk in his role as CEO.

“This is one of those circumstances where someone has to say, ‘Enough is enough,'” Lehrman said.

Retail wildcard

Despite the regulation by pension funds, the battle to influence voting remains uphill, though that’s no reason not to speak out, Lerman noted. Tesla appears to be in a position to gain approval for Musk’s new payment plan based on Musk’s ownership, voting history of large institutional investors, and the company’s track record with individual owners.

FGS Globala strategic company working with Tesla, confirmed luck That shares owned by Musk — and his brother and fellow board member Kimbal Musk — could be voted in favor of the two major corporate proposals. That is, there is no minority majority requirement, which is a corporate governance mechanism where the deal or proposal must be approved by a majority of shareholders who do not participate in the deal. Currently, Musk owns about 20% of the company and Kimbal Musk owns about 1.5 million shares, less than 1% of Tesla’s outstanding shares. In addition, major institutional investors Black Rock and Vanguard They own approximately 13% of Tesla, and both voted in favor of certifying Musk’s pay in 2024.

According to FactSet, retail shareholders equate to about 34% of shares outstanding. Last year’s ratification vote saw 72% of the total vote approve his salary, which excluded stocks tied to Musk and his brother.

Given the level of internal control as well as Tesla’s control over its own retail base, proxy advisory firms like it International Space Station Levine said he and Glass Lewis would not be a determining factor even if they recommended investors oppose the wage proposals. Likewise, BlackRock and Vanguard don’t reveal their votes in advance, but it might not be a big deal even if they suddenly reversed course on Musk’s pay this year compared to last.

However, Levin said Musk is unlikely to leave anything to chance, given his ownership stake in Tesla.

If Musk leaves Tesla, it will be terrible for investors. The stock will likely fall immediately. “This is probably a risk that this council is not willing to take,” Levin said. “But I think the cost of avoiding that risk is very high — it’s a trillion dollars of equity.”

Tesla shareholders meeting is decided Scheduled for November 6 at its headquarters in Austin, Texas.