Proxy adviser ISS urges Tesla shareholders to reject Elon Musk’s $1 trillion pay package ahead of Nov 6 vote
Institutional Shareholder Services (ISS) proxy counsel, who participated in the objection to Tesla’s proposed $1 trillion pay package for CEO Elon Musk, urged shareholders to vote against the plan on November 6, Bloomberg reported.
He added that this was the second year in a row that ISS opposed a pay package for Elon Musk and urged shareholders to vote against it.
Why does ISS oppose $1 trillion compensation to Elon Musk?
Among other reasons, ISS expressed concerns on October 17 about Elon Musk’s attention being divided among five businesses, including Tesla (the other four are Neuralink, SpaceX, Boring Company and xAI).
In a guidance issued to shareholders ahead of the Nov. 6 vote, ISS said the sky-high pay package was designed to keep Elon Musk at Tesla and keep his focus on the electronic vehicle (EV) maker, but that “there is no clear requirement to ensure this is the case.”
The report also noted “unmitigated concerns” about the size and design of the plan.
‘ISP is completely missing the basics…’ says Tesla
In a post on Elon Musk-owned social media site
“ISS once again completely misses the fundamentals of investing and governance. It recommended against compensation that shareholders have already voted on twice (and that Elon has already won), as well as the 2025 CEO Performance Award (in which Elon will get nothing unless shareholders win big),” the company’s official account said.
Describing the ISS’s advice as “baseless and ridiculous”, the agency claimed that it “proves how disconnected they are from reality”.
“As Tesla’s longest-serving independent director, Ira has established a governance framework that has enabled Tesla to achieve a staggering TSR increase of ~39,000% during his tenure. He epitomizes our highly engaged Board of Directors with hands-on leadership + effective management focused on long-term value,” he added.
“It’s easy for the ISP to tell others how to vote when there’s nothing there. Vote with Tesla on ALL proposals,” Tesla insisted.
Elon Musk’s $1 trillion Tesla payment plan sparked investor reaction
According to Forbes, Tesla investors, including government officials, also opposed the $1 trillion payment package Tesla offered for Elon Musk on October 2. According to the report, shareholders urged other investors to reject the pay package at Tesla’s annual shareholder meeting on November 6.
The letter signed by leading investors, including SOC Investment Group and the American Federation of Teachers; The state treasurers of Nevada, New Mexico, Connecticut, Massachusetts, Colorado and Maryland and New York City auditors accused the board of “damaging Tesla’s reputation” in its fight to retain Elon Musk.
Tesla shareholders will vote on November 6
Tesla shareholders will vote on the pay package at the annual meeting on November 6.
Notably, ISS and fellow proxy firm Glass Lewis also recommended shareholders reject Elon Musk’s 2018 salary deal; About 75 percent of investors still supported the package.
In 2024, a Delaware judge struck down that plan after finding that Elon Musk had undue influence over the process and that the board had conflicts of interest. The world’s richest man later cited the wage dispute as part of the reason Tesla moved its corporate headquarters from Delaware to Texas.
Elon Musk and Tesla continued their legal fight to object to the decision, this time before the Delaware Supreme Court on October 15.
(With input from Bloomberg)
