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Tesla has criticised proxy advisor firm Institutional Shareholder Services (ISS). This comes after ISS recommended shareholders vote "no" on CEO Elon Musk's $1 trillion compensation plan. Claiming that the pay package is designed to keep Musk leading the company through a series of demanding incentives, Tesla responded to the negative recommendation in a post on the social media site X (formerly Twitter), writing: "ISS once again completely misses fundamental points of investing and governance." The recommendation creates a fresh hurdle for Tesla's board just weeks before the annual shareholder meeting on November 6. This is the second consecutive year ISS has advised against Musk’s pay plan, citing concerns over the "magnitude and design" of the proposal. ISS also argued that the package offered no guarantee that Musk would focus on Tesla over his other ventures, including SpaceX, Neuralink, and xAI.The new compensation plan, introduced in September, is designed to keep Elon Musk focused on Tesla for the next ten years.
It ties his full payout and increased voting power to the company reaching a market value of $8.5 trillion and expanding its EV, robotics, and robotaxi businesses, which could raise his ownership stake to about 25%.
What Tesla said to its shareholders about Elon Musk’s pay package
In its X post, Tesla wrote: “ISS once again completely misses fundamental points of investing and governance.They recommended against compensation that shareholders have voted on twice before (and that Elon has already earned), as well as the 2025 CEO Performance Award (where Elon receives nothing unless shareholders win big).ISS’s unfounded and nonsensical recommendation against Ira proves how disconnected from reality they are. As Tesla’s longest-tenured independent director, Ira has created a governance framework that has allowed Tesla to achieve an astonishing TSR increase of ~39,000% during his tenure. He embodies our high-engagement Board – with hands-on leadership + effective governance with a focus on long-term value.It’s easy for ISS to tell others how to vote when they have nothing on the line.Vote with Tesla on ALL proposals.”
What ISS said about Elon Musk’s pay package
“The award is largely intended to retain Musk and keep his time and attention on Tesla rather than his other business ventures, but there are no explicit requirements to guarantee this outcome,” the ISS wrote in a report, citing “unmitigated concerns” about the plan’s magnitude and design.ISS also recommended against providing Musk with any backpay tied to the voided 2018 plan and advised shareholders to reject a proposal for Tesla to invest in Musk’s AI company, xAI, describing it as “highly unusual.”
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