Ann Lipton, a University of Colorado Law School professor, told the Financial Times that she expects shareholders to approve the latest pay package despite the ISS recommendation. “They recommended against it before and the shareholders voted in favor, and this time Elon Musk gets to vote… and his brother gets to vote,” she said. “That wasn’t true last time. I strongly expect that all of these proposals are going to go Tesla’s way.”
Pay plan goals are vaguely defined, letter says
The Musk pay plan was also opposed in a letter signed by the American Federation of Teachers; state treasurers from Nevada, Massachusetts, and New Mexico; and comptrollers from New York City and Maryland.
“We believe the Board’s failure to ensure CEO Musk devotes full attention to Tesla, while making him the highest-paid CEO in history, shows how beholden it is to management,” the letter said. “The Board has permitted Mr. Musk to be over-committed for years, allowing him to continue as CEO while taking time-consuming leadership roles at his other companies, xAI/X, SpaceX, Neuralink, and Boring Company.”
The letter said the pay plan’s vehicle-delivery goal could be reached even if annual sales decrease and that the Full Self-Driving subscription goal is “carefully worded to not actually require that the service ever achieves full unsupervised self-driving.”
The letter said the goal of delivering 1 million AI robots or “bots” is so vague that “even if Tesla fails to develop a commercially successful robot, it could market devices developed and manufactured by other firms and still achieve this milestone.” The robotaxi goal similarly “does not require that Tesla has designed and developed the robotaxis in question, nor that their operation be profitable,” the letter said.
The letter faulted the board for letting Musk take “a leadership position at the US Department of Government Efficiency (DOGE), a role widely seen as having a negative impact on the Company’s performance and brand… In our view, the Board’s failure to limit Mr. Musk’s outside endeavors while rewarding him with unprecedented pay packages for only a part-time commitment strongly indicates a lack of true independence by management and jeopardizes long-term shareholder value.”
