Crack between Musk and shareholders: the scandal over the “trillion-dollar package” at Tesla has broken out
3 October 20:17
A group of Tesla shareholders has come out against the $1 trillion compensation package for Ilon Musk, demanding that it be rejected at an upcoming investor meeting, reports "Komersant Ukrainian".
In an open letter cited by Reuters, SOC Investment Group, along with the state treasurers of Nevada, New Mexico and Connecticut, urged shareholders to not only say no to the pay package, but also not to re-elect a portion of the board of directors.
What are the critics’ arguments
The authors of the appeal argue:
- the board is “unduly focused” on keeping Musk;
- it has caused delays in implementing the decisions of the last annual meeting;
- the company has deteriorated its financial and operating results;
- there is inadequate management oversight.
New York Comptroller Brad Lender, who has long expressed skepticism about Tesla’s governance, also joined the critics.
What the package provides
Compensation is for 10 years (with an option to extend to 2035) and consists of phased equity payments. It is contingent on the company achieving clear goals:
- tesla’s capitalization must grow to $8.5 trillion;
- adjusted EBITDA to reach $400 billion.
Musk will receive the maximum payout only if these targets are met.
The company’s response
Tesla denies the allegations. In Social Network X, the company said that the remuneration package is directly linked to the growth of the value of the business.
“If Ilon Musk does not achieve results – he will receive nothing,” – noted in Tesla.
What’s next
A key vote will take place on Nov. 6. That’s when shareholders will decide whether to approve Musk’s record compensation and whether to keep the current board of directors.
This is not Tesla’s first conflict with shareholders over Musk’s remuneration.
- In 2018, the company already adopted one of the largest compensation plans in corporate history, which also sparked a high-profile debate.
- Musk runs several companies simultaneously (SpaceX, X, Neuralink), and critics regularly chide him for focusing too much on other projects.
- Tesla faces a downturn in demand for electric cars in 2025, increased competition from Chinese manufacturers and a falling stock market value.
