Key Takeaways
- Proxy adviser ISS recommends Tesla shareholders reject Elon Musk’s $1 trillion compensation package
- ISS cites concerns over Musk’s divided attention across five companies
- Tesla strongly defends the pay plan, calling ISS recommendations “unfounded and nonsensical”
- Shareholders will vote on the package at Tesla’s annual meeting on November 6
ISS Opposes Musk’s $1 Trillion Pay Package
Institutional Shareholder Services (ISS) has urged Tesla shareholders to reject CEO Elon Musk’s proposed $1 trillion compensation package ahead of the November 6 vote. This marks the second consecutive year the influential proxy adviser has opposed Musk’s pay plan at Tesla.
Why ISS Recommends Voting Against the Package
ISS expressed significant concerns about Musk’s divided attention between his five companies: Tesla, Neuralink, SpaceX, the Boring Company, and xAI. In guidance issued to shareholders, ISS noted that while the massive pay package aims to retain Musk and keep him focused on Tesla, “there are no explicit requirements to ensure that this will be the case.”
The advisory firm also cited “unmitigated concerns” with the plan’s magnitude and design structure.
Tesla’s Strong Response
Tesla fired back at ISS through a post on X (formerly Twitter), calling their recommendations “unfounded and nonsensical.” The company stated: “ISS once again completely misses fundamental points of investing and governance. They recommended against compensation that shareholders have voted on twice before (and that Elon has already earned), as well as the 2025 CEO Performance Award (where Elon receives nothing unless shareholders win big).”
Tesla defended its governance framework, noting that under independent director Ira’s leadership, the company achieved “an astonishing TSR increase of ~39,000% during his tenure.”
Growing Investor Opposition
The ISS recommendation follows earlier opposition from prominent investors. On October 2, state officials and institutional investors including the SOC Investment Group and American Federation of Teachers urged rejection of the pay package. State treasurers from Nevada, New Mexico, Connecticut, Massachusetts, Colorado, and comptrollers from Maryland and New York City accused Tesla’s board of “harming Tesla’s reputation” in their efforts to retain Musk.
Historical Context and Legal Battle
This isn’t the first time ISS has opposed Musk’s compensation. The proxy firm and Glass Lewis both advised against Musk’s 2018 pay deal, though approximately 75% of shareholders still approved it.
That 2018 package was later struck down by a Delaware judge who found Musk had undue influence over the process and the board had conflicts of interest. The pay dispute contributed to Tesla moving its corporate headquarters from Delaware to Texas.
Musk and Tesla have resumed their legal fight, appealing the ruling before the Delaware Supreme Court on October 15.
