Elon Musk’s $1 trillion Tesla pay deal sparks investor backlash

Tesla is facing severe resistance from investors over CEO Elon Musk’s proposed $1 trillion compensation package, ahead of a crucial shareholder vote that could trigger another lengthy legal showdown.

A coalition of unions, state treasurers, and institutional investors, including the SOC Investment Group, the American Federation of Teachers, and New York City Comptroller Brad Lander, released a joint letter urging shareholders to reject the plan.

They argued that the terms are excessive, the performance goals lack transparency, and Tesla’s board remains too loyal to Musk to act independently.

Unveiled last month, the plan would stretch over the next decade.

Musk would need to raise Tesla’s market capitalisation to $8.5 trillion and meet ambitious targets, such as generating $400 billion in annual earnings, producing one million Optimus humanoid robots, and delivering about 12 million electric vehicles by 2035.

However, critics say some benchmarks are less challenging than they appear. Tesla sold more than 1.8 million vehicles in 2024, making the yearly average of 1.2 million deliveries seem modest.

They also questioned Musk’s divided attention among his other ventures, SpaceX, Neuralink, and X (formerly Twitter), noting there’s no commitment to dedicate more time to Tesla.