Before Tesla’s annual general meeting on Thursday, the electric carmaker has pushed one clear message to investors: its boss deserves $1 trillion. The company has launched digital ads promoting Elon Musk’s proposed pay deal. On Votetesla.com, a video shows board chair Robyn Denholm and director Kathleen Wilson-Thompson praising him as uplifting music builds in the background. Yet not all investors are convinced. The meeting in Austin, Texas, looks set to become a public judgment on Musk himself, whose political shifts have made him one of the most divisive business figures of recent years. Musk has used X, his own platform, to increase the pressure, warning that Tesla’s fate “could affect the future of civilization.” He has also highlighted support from influential backers, including Dell founder Michael Dell, Ark Invest’s Cathie Wood, and his brother Kimbal, who sits on Tesla’s board. “There is no one remotely close to my brother,” Kimbal said, praising Elon’s leadership. Musk simply replied, “Thanks bro ❤️.”
Growing doubts about Musk’s leadership
Many investors say the focus on Musk’s pay shows how Tesla has lost direction as sales fall. “What’s amazing to me is a company struggling to sell cars spends money on advertising to sell a pay package,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management. He has reduced his Tesla holdings and criticised the firm’s recent choices. “Tesla needs to get back to its core – selling electric cars,” he said.
The trillion dollar challenge
The proposed package is not a $1tn salary. Instead, it challenges Musk to raise Tesla’s market value from $1.4tn to $8.5tn. He must also lead a boom in self-driving “Robotaxi” cars, with one million entering commercial use. That would be a huge achievement after their shaky launch. If Musk meets those goals, he would receive 423.7 million new shares worth nearly $1tn at the target valuation. Tesla has not replied to reporters asking about its campaign to secure shareholder support.
This is not Tesla’s first pay dispute. Shareholders twice approved huge compensation deals if Musk delivered major market growth. He achieved those milestones, but in 2024 a Delaware judge rejected one agreement, saying Tesla’s board was too closely tied to Musk. The Delaware Supreme Court is now reviewing that ruling as the company pursues this even bigger plan.
“The approach is typical for Tesla, but nothing about Tesla is normal,” said Columbia Law School professor Dorothy Lund in an interview. “They’re not a model of good corporate governance.” She added that campaigns to rally shareholder votes usually happen when a company fears activist investors, not over pay decisions. “I’ve never seen this kind of campaign for executive compensation,” she said.
Both Elon and Kimbal Musk will vote this time as they try to reach the majority needed to approve the deal. Musk, already the world’s richest man, became the first half-trillionaire earlier this year.
A board under pressure
Tesla’s leadership says losing Musk would be a major risk. The company insists he “uniquely possesses the leadership needed to achieve its long-term mission.” In a video on Votetesla.com, Wilson-Thompson said the board worked for seven months with experts to design the pay package. During last month’s earnings call, Musk downplayed the payout, saying he only needed enough control to guide Tesla effectively.
But many critics argue the board’s role is not to promote its CEO. “The board should protect shareholders, not campaign for the chief executive,” said Yale professor Matthew Kotchen, who co-authored a study on the recent damage to Tesla’s brand.
Several major institutions agree the package offers poor value. Proxy advisers Glass Lewis and Institutional Shareholder Services told investors to reject the plan, calling it excessive and harmful to shareholders. Norway’s sovereign wealth fund, the world’s largest, also plans to vote no, along with the biggest U.S. public pension fund, CalPERS. New York State Comptroller Thomas DiNapoli has urged investors to oppose Tesla directors up for re-election, accusing them of failing “to provide independent oversight and accountability.”
The vote that could reshape Tesla
With major institutions resisting, Musk may rely on Tesla’s army of small retail investors, who usually back him. Morgan Stanley analyst Adam Jonas called Thursday’s vote one of “the most important events” in Tesla’s history, warning there is a “distinct possibility” the package could fail.
Musk’s campaign faces more headwinds as protests continue against Tesla months after his brief role in Donald Trump’s administration ended in controversy. “It’s hard to imagine Musk quickly repairing the damage to this brand,” said Kotchen.
Others, however, believe betting against Musk is risky. “Elon Musk’s larger-than-life personality has drawn more attention to Tesla than almost any other leader,” said Jessica Caldwell, head of insights at Edmunds. “He’s more polarising now, but many still believe in his ability to turn bold ideas into reality,” she added.
The trillion dollar question now hangs in the air: will Tesla’s shareholders decide he’s worth the gamble?
