As the annual shareholder meeting of Tesla, Inc. draws near this Thursday in Austin, Texas, scrutiny is already building around the company’s most provocative item on the agenda: the proposed compensation package for CEO Elon Musk, which could push the billionaire’s personal pay towards the unprecedented sum of one trillion dollars.
The trillion-dollar ask
Tesla’s board has proposed a plan that could grant Musk up to 12 per cent of the company’s stock – roughly equivalent to a value of $1 trillion but only if a slew of aggressive performance benchmarks are hit.
These targets include growing Tesla’s market value from about $1 trillion today to as much as $8.5 trillion, achieving milestones in robotaxis and humanoid robotics, and vesting over a multi-year horizon.
Musk currently holds a roughly 13 % stake in Tesla and has emphasized his concern about retaining control: “if I go ahead and build this enormous robot army, can I just be ousted at some point in the future? That’s my biggest concern,” he said.
While proponents argue Musk’s compensation is justified based on his visionary role and the stakes involved, critics say the size, dilution effects and governance risks are simply excessive.
For example, the vast majority of compensation would be incentive-based and linked to future achievements, which some see as reasonable.
But others call the package “way beyond anything that resembles reasonableness in terms of compensation,” noting that it would give Musk control of a quarter of the company.
Institutional pushback and governance questions
One of the loudest warning signs comes from Norway’s sovereign wealth fund, which holds a 1.2 % stake in Tesla. The fund said it will vote against Musk’s new package, citing concerns over “the total size of the award, dilution, and lack of mitigation of key person risk.”
Meanwhile, independent proxy advisors such as Glass Lewis and ISS have recommended against approval – pointing to the broad discretion granted to the board to release tranches even if some metrics are missed, and the risk of diluting shareholders.
Board composition is also under focus. Several directors who helped approve the package – including venture capitalist Ira Ehrenpreis and HR-executive Kathleen Wilson‑Thompson face reelection at the meeting.
Their prior compensation has sparked separate scrutiny, with earlier settlements requiring some directors to return hundreds of millions.
Beyond pay: Strategic distractions and the xAI variable
The compensation fight is not the only flash-point. Musk’s involvement in other ventures – including xAI (his AI startup), SpaceX, and his broader business and political interests has raised questions among investors about his focus and the fairness of asking Tesla shareholders to fund ventures that may benefit him personally.
For example, a potential investment or tie-up between Tesla and xAI is on the agenda, but the Tesla board is not making a recommendation – leaving shareholders to judge for themselves, amid concerns about self-dealing.
What to watch on Thursday
When the meeting opens, the key questions for investors will be: Will shareholders approve the mammoth pay package?
Will they support the reelection of the board members behind it? And how will they respond to the proposal linking Tesla to Musk’s other ventures?
The vote may be close, but analysts expect approval is likely — given Musk’s pivotal role at Tesla.
Still, the dissent from major investors and proxy firms means the signal sent by the vote will matter beyond just the outcome: it will reflect wider investor sentiment on governance, executive pay, and what it takes to keep Musk at the helm of such a high-stakes company.
