Tesla is heading toward one of the most decisive moments in its history. Ahead of Thursday’s annual general meeting, the company has a single message for shareholders: Elon Musk deserves a $1 trillion reward. The electric carmaker has launched an aggressive campaign to promote the plan. Digital ads highlight Musk’s achievements, and on Votetesla.com, board chair Robyn Denholm and director Kathleen Wilson-Thompson appear in a video praising him while epic music plays in the background. But not all investors are convinced. The meeting in Austin, Texas, is expected to be a referendum on Musk’s leadership. His outspoken political views and unpredictable behavior have made him one of the most divisive business figures of the decade. On X, the platform he owns, Musk warned that Tesla’s fate “could affect the future of civilization.” He also shared support from Michael Dell, Ark Invest CEO Cathie Wood, and his brother Kimbal, a Tesla board member. “There is no one remotely close to my brother,” Kimbal said. Musk replied with a simple “Thanks bro ❤️.”
Investors lose patience
For some investors, the pay debate symbolizes Tesla’s loss of focus. Car sales are falling, and critics say Musk’s attention has drifted toward his other ventures. “What’s unbelievable is a company struggling to sell cars spending money to sell a pay package,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management. He has cut his Tesla holdings and intensified his criticism. “Tesla must return to its roots—building and selling electric vehicles,” he said.
The trillion-dollar target
The proposed deal is not a $1 trillion paycheck. Instead, it gives Musk the task of raising Tesla’s market value from $1.4 trillion to $8.5 trillion. He must also deliver one million self-driving “Robotaxi” cars into commercial use — an ambitious goal given their slow progress so far. If Musk succeeds, he would receive 423.7 million new shares, worth nearly $1 trillion at the target valuation. Tesla has not commented on its campaign to persuade investors.
This is not Musk’s first pay controversy. Shareholders once approved a multibillion-dollar deal rewarding him for increasing Tesla’s value tenfold. He achieved it, but in 2024, a Delaware judge struck the package down, ruling that the board was too closely tied to him. The Delaware Supreme Court is now reviewing that decision, even as Tesla pushes for this much larger plan.
“Tesla’s behavior is unusual but typical for the company,” said Columbia Law School professor Dorothy Lund. “They’re not known for good corporate governance.” She added that shareholder campaigns like this usually occur when activist investors threaten major changes. “I’ve never seen this kind of effort for a pay decision,” she said.
Elon and Kimbal Musk will both vote on the plan this time, which could help secure the majority needed for approval. Musk, already the world’s richest man, became the first half-trillionaire earlier this year.
The board under fire
Tesla argues that losing Musk would threaten its future. The company says he “uniquely possesses the leadership qualities needed to fulfil its mission.” In the video on Votetesla.com, Wilson-Thompson explained that the board spent seven months working with legal and compensation experts to design the plan. During a recent earnings call, Musk downplayed the payout, saying his main goal was to maintain enough control to steer Tesla in the right direction.
Critics disagree. “The board’s job is to protect shareholders, not campaign for a CEO,” said Yale professor Matthew Kotchen, who co-authored a study assessing the damage Musk has caused to Tesla’s reputation.
Several major institutions have joined the opposition. Proxy advisers Glass Lewis and Institutional Shareholder Services have urged investors to reject the deal, calling it excessive and damaging to shareholder value. Norway’s sovereign wealth fund — the world’s largest — plans to vote no, as does CalPERS, the biggest U.S. public pension fund. New York State Comptroller Thomas DiNapoli has also encouraged investors to oppose Tesla’s board members, accusing them of failing to provide “independent oversight and accountability.”
The vote that could redefine Tesla
With large investors lining up against him, Musk may depend on Tesla’s vast base of retail shareholders, who typically back him with strong loyalty. Morgan Stanley analyst Adam Jonas described Thursday’s vote as one of “the most important events in Tesla’s history,” warning there’s a “real possibility” the plan could fail.
Outside Tesla, Musk continues to face criticism. Protests have followed his controversial role in Donald Trump’s short-lived administration earlier this year. “It’s hard to imagine Musk quickly undoing the damage he’s done to Tesla’s image,” said Kotchen.
Still, supporters believe his vision remains unmatched. “Musk’s larger-than-life personality has brought more attention to Tesla than any other business leader could,” said Edmunds’ head of insights Jessica Caldwell. “He’s polarizing, but many still believe in his ability to achieve the extraordinary,” she added.
Now, the company faces a defining moment. Will Tesla’s shareholders reward Musk with a $1 trillion payday — or decide his era of unchecked dominance has gone too far?
