Investors and State Officials Challenge Elon Musk’s $1 Trillion Pay Plan

A coalition comprising Tesla shareholders, including SOC Investment Group and various state officials, has raised significant concerns regarding Elon Musk’s proposed $1 trillion pay package. This group urges investors to reject the plan at Tesla’s upcoming shareholder meeting in November, according to a recent regulatory filing.

Concerns About Board Decisions

The coalition’s letter highlights key issues surrounding Tesla’s board of directors. It includes state treasurers from Nevada, New Mexico, and Connecticut, who have expressed particular dissatisfaction with the board’s continuous support for Musk. They argue this has hindered the progress on important goals established in the previous annual meeting.

Declining Performance and Oversight Issues

Members of the coalition pointed to dwindling operational and financial metrics. They accuse the board of failing to provide adequate oversight of management. This has led to concerns about Tesla’s strategy and future prospects, despite reporting record quarterly deliveries recently.

Opposition from State Officials

• New York City Comptroller Brad Lander is a notable critic of the board.
• Lander has been involved in shareholder reform efforts, even though the city’s pension funds do not rank among Tesla’s largest shareholders.
• His term as Comptroller is set to conclude on January 1, 2026.

Implications of the Pay Package

The proposed compensation plan for Musk is touted as the largest in corporate history. It seeks to set challenging performance targets while addressing Musk’s demand for increased authority within the company. In response to criticism, Tesla asserted that the performance incentive plan is designed to align Musk’s pay with the creation of shareholder value.

Future Performance Expectations

Tesla stated that Musk will receive no compensation if he does not meet the outlined performance goals. As the automotive industry shifts, concerns surrounding U.S. electric vehicle tax credits may also impact sales dynamics.