Thought Elon Musk’s $1 trillion Tesla pay package would have an easy ride?
Think again.
A second influential proxy-advisory firm is urging Tesla shareholders to vote against Elon Musk’s proposed $1 trillion compensation deal, warning that it would hand the billionaire CEO an “unprecedented” payout while shrinking other investors’ stakes.
Glass Lewis & Co. told clients in a paper published last Friday that the award “warrants significant shareholder concern.”
It joined Institutional Shareholder Services (ISS) in opposing the deal ahead of Tesla’s November 6 annual meeting.
Tesla did not immediately respond to a request for comment.
‘Excessively dilutive’ and ‘extraordinary’
Glass Lewis’s 90-page report, reviewed by Business Insider, calls the package “excessively dilutive,” estimating that, if fully exercised, it could cut existing shareholders’ ownership by about 11.3%.
The firm valued the deal at $141.6 billion — far above Tesla’s own $87.8 billion estimate — and said Musk could reap “billions in compensation and a materially increased ownership stake” even if he hits just one of the 12 performance tranches.
“The potential upfront and future dilutive impacts to shareholders, as well as extraordinary pay levels without commensurately exceptional performance through the achievement of even just a few tranches, warrant significant concern,” Glass Lewis wrote in its analysis.
The package would grant Musk up to 423 million shares, or about 12% of Tesla’s adjusted share count, if he meets a set of market-cap and 12 operational milestones — including pushing Tesla’s valuation to $8.5 trillion by 2035.
Governance and focus under fire
The report also raised red flags about Tesla’s board independence and oversight of Musk’s pay.
Glass Lewis said Musk’s compensation is being reviewed by a board that has long faced questions about its closeness to the CEO, citing directors with personal or professional ties to him that date back years.
The firm said that dynamic was central to a Delaware court ruling earlier this year that struck down Musk’s 2018 pay package, finding that those relationships compromised the approval process.
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Those concerns remain relevant now, Glass Lewis added.
Glass Lewis also questioned controls on ensuring Musk’s focus remains on Tesla, given his slate of other ventures, including SpaceX, xAI, X, and Neuralink.
“The size of the award could result in the scenario where Mr. E. Musk receives billions in compensation and a materially increased ownership stake,” the firm said, “even if only a single tranche is earned.”
The report further argued that the early milestones “do not appear as herculean as the size of the proposed tranches would suggest,” implying Musk could unlock massive value without delivering the kind of outlier performance the package purports to demand.
Tesla and its allies push back
While Tesla did not respond to Business Insider, it sent a fiery X post on Monday, blasting ISS and Glass Lewis as “misguided.”
The post said both firms have “recommended against Tesla’s proposals time and time again since the 2018 CEO Performance Award was introduced.”
“It’s a good thing our shareholders ignored those recommendations,” Tesla wrote, “otherwise they may have missed out on our market capitalization soaring by 20x from March 2018 to August 2025.”
The company accused the advisors of using “one-size-fits-all checklists” that “undermine shareholders’ interests,” and added their recommendations “attempt to override the mandate our shareholders delivered to Elon and ignore the staggering financial results delivered under Elon’s leadership.”
Cathie Wood, the founder of ARK Invest and a longtime Tesla supporter, predicted the plan would still pass “decisively” despite opposition from proxy firms and index funds.
She accused them of trying to sway shareholders while doing “no fundamental research,” calling index-based investing “a form of socialism.”
