Tesla is entering one of the most critical moments in its history. Ahead of Thursday’s annual general meeting, the company is making an aggressive push to convince shareholders that Elon Musk deserves a $1 trillion pay package. Digital ads highlight his achievements, while Votetesla.com shows board chair Robyn Denholm and director Kathleen Wilson-Thompson praising Musk to dramatic music. But investor opinion is divided. The meeting in Austin, Texas, could become a direct vote on Musk’s leadership. His political stances and unpredictable style have made him one of the most polarizing figures in business. On X, the platform he owns, Musk warned that Tesla’s success “could affect the future of civilization.” He also promoted support from Michael Dell, Ark Invest CEO Cathie Wood, and his brother Kimbal, a Tesla board member. “There is no one remotely close to my brother,” Kimbal said. Musk replied: “Thanks bro ❤️.”
Shareholders voice concern
Many investors view the pay debate as a symptom of Tesla’s deeper challenges. Car sales have slowed, and critics argue Musk has shifted focus away from the company’s core mission. “It’s astounding that a company struggling to sell cars spends money promoting a pay package,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management. He has reduced his Tesla holdings and grown more critical. “Tesla needs to return to its roots—making and selling electric vehicles,” he said.
The trillion-dollar challenge
The proposed package does not deliver $1 trillion directly to Musk. It sets a high bar: he must increase Tesla’s market value from $1.4 trillion to $8.5 trillion. He also needs to oversee the deployment of one million “Robotaxi” self-driving vehicles, despite the technology’s slow rollout. If successful, Musk would receive 423.7 million new shares, worth nearly $1 trillion at the target valuation. Tesla has not commented on its strategy to win over shareholders.
This is not Musk’s first pay controversy. An earlier multibillion-dollar package rewarded him for increasing Tesla’s value tenfold. Though he met that goal, a Delaware judge voided the plan in 2024, citing conflicts of interest with the board. The Delaware Supreme Court is now reviewing the case while Tesla seeks approval for this larger plan.
“Tesla continues to defy conventional corporate behavior,” said Columbia Law professor Dorothy Lund. “They are far from a model of good governance.” She noted that shareholder campaigns like this usually occur when activist investors push for change, not over executive pay. “I’ve never seen anything like it,” she said.
Both Elon and Kimbal Musk will vote on the proposal, giving them significant influence. Musk, already the world’s richest man, became the first known half-trillionaire earlier this year.
The board’s defense
Tesla insists it cannot afford to lose Musk. The company argues he “uniquely possesses the leadership qualities needed to achieve its long-term mission.” In the Votetesla.com video, Wilson-Thompson said the board spent seven months consulting legal and compensation experts to design the package. During Tesla’s earnings call, Musk emphasized that the real issue was control, not pay, saying he needs authority to guide the company.
Critics argue the board is overstepping. “A board’s duty is to protect shareholders, not advocate for a CEO,” said Yale professor Matthew Kotchen, co-author of a study on Musk’s recent impact on Tesla’s reputation.
Institutional investors are pushing back. Proxy advisers Glass Lewis and ISS recommend rejecting the package, citing excessiveness and harm to shareholder value. Norway’s sovereign wealth fund—the world’s largest—and U.S. pension giant CalPERS plan to vote no. New York State Comptroller Thomas DiNapoli has urged investors to reject Tesla directors, claiming the board failed to ensure “independent oversight and accountability.”
The vote that could reshape Tesla
With major institutions opposing the plan, Musk may rely on Tesla’s retail investors, who tend to be loyal supporters. Morgan Stanley analyst Adam Jonas called Thursday’s vote “one of the most important events in Tesla’s history,” warning that the proposal faces real risk of rejection.
Outside corporate decisions, Musk continues to face scrutiny. Protests against him have continued months after his short-lived role in Donald Trump’s administration. “It’s hard to see Musk quickly repairing the damage to Tesla’s brand,” said Kotchen.
Yet supporters remain confident. “Musk’s vision and personality have generated more attention for Tesla than almost any other CEO,” said Edmunds’ Jessica Caldwell. “He’s polarizing, but investors still believe he can make the impossible happen.”
Now the question looms over Tesla: will shareholders grant Musk the $1 trillion he seeks—or decide it’s time to chart a new course?
