The electric car maker announced a $1 trillion compensation plan proposed by Chief Executive Elon Musk in September.
Published October 17, 2025
Tesla Inc.’s proposed $1 trillion payout for Chief Executive Officer Elon Musk is under renewed scrutiny after proxy advisor Institutional Shareholder Services (ISS) called on investors to vote against what could be the largest payout ever given to a company CEO.
Friday’s comments mark the second year in a row that ISS has asked shareholders to reject Musk’s compensation plan.
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Proxy voting advisors often work with large institutional investors, including passive funds, which own large amounts of Tesla stock.
The ISS recommendation increases pressure on Tesla’s board ahead of a closely watched shareholder meeting on Nov. 6 and renews scrutiny of Musk’s pay after a Delaware court earlier vacated his $56 billion compensation.
But even if he fails to meet most of his ambitious goals, Musk’s record Tesla pay plan could hand him tens of billions of dollars, thanks to a system that rewards partial accomplishments and soaring stock prices.
Last month, Tesla’s board proposed a $1 trillion compensation plan for Musk, billed as the largest corporate pay package in history, aimed at setting ambitious performance goals and addressing Musk’s demands for greater control over the company.
ISS said that while the board’s goal was to retain Musk because of his “track record and vision,” the 2025 salary package “locks in very high salary opportunities for the next 10 years” and “reduces the board’s ability to meaningfully adjust future pay levels.”
Tesla stock rose after the compensation plan was announced last month, as investors believe the package will incentivize Musk to focus on the company’s strategy.
“A lot of people came to Tesla specifically to work with Elon, so we recognize that retaining and encouraging him will help us retain and recruit better talent in the long run,” director Kathleen Wilson Thompson said in a video posted to Tesla’s X handle Friday.
Unlike the 2018 salary agreement, Musk will now be allowed to vote with his stock holdings, giving him about 13.5% of Tesla’s voting power, according to last month’s securities filing. This stake alone would be enough to secure approval.
The proxy advisor cited the “astronomical” size of the proposed grant, design features that could result in very high payouts for partial goal achievement, and potential dilution to existing investors.
Tesla did not immediately respond to a request for comment from Reuters.
ISS valued stock-based compensation at $104 billion, higher than Tesla’s own estimate of $87.8 billion.
The subsidy will only be awarded if Tesla achieves a market capitalization milestone of up to $8.5 trillion and operational goals that include delivering 20 million vehicles, 1 million robotaxis and $400 billion in adjusted core profits.
The proxy advisor guidance on Musk’s compensation was part of a broader voting advisory issued Friday.
As of 3:45 p.m. (7:45 p.m. Japan time) in New York, Tesla shares were up 2.4%.
