Both Major Proxy Advisory Firms Urge Opposition to Musk Compensation Package

by Oh Suyon

Published 21 Oct.2025 09:57(KST)

Tesla Pushes Back Against "Misguided Recommendation"

On October 20 (local time), Bloomberg News reported that, ahead of Tesla's shareholder meeting, Glass Lewis has joined ISS in urging shareholders to vote against the $1 trillion (approximately 1,420 trillion won) compensation package for Elon Musk, CEO of Tesla.

In a report released that day, Glass Lewis stated that the potential dilution of shareholder value and the terms of the proposed compensation package "raise serious concerns."

Elon Musk, CEO of Tesla. Reuters Yonhap News

Glass Lewis also expressed opposition to Tesla's proposal to invest in Musk's artificial intelligence (AI) startup, xAI.

Previously, on October 17, ISS also recommended that Tesla shareholders vote against both the compensation package for Musk and the investment in xAI. Both major proxy advisory firms have thus recommended opposition.

On the same day, Tesla stated via its social networking service X (formerly Twitter), "Glass Lewis has followed ISS with yet another misguided recommendation," adding, "The recommendation ignores the mandate given to Elon by shareholders, disregards the remarkable financial performance achieved under Elon’s leadership, and prioritizes rigid policies over shareholder value."

Proxy advisory firms have significant influence over the decision-making of large institutional investors, such as passive funds. However, last year, Glass Lewis recommended voting against a proposal to grant Musk a total of 303 million stock options, but the proposal was approved at the shareholder meeting.

Tesla has proposed a $1 trillion compensation package to incentivize Musk to remain involved in the company’s management for the next ten years. Under this plan, over 420 million shares would be awarded in 12 tranches by 2035, depending on future business performance. To receive this, Musk must raise Tesla’s market capitalization to over $850 billion and significantly expand core businesses such as automobiles, robotics, and robotaxis.

According to proxy materials, if the compensation package is approved, Musk’s stake in Tesla would increase to over 25%. Musk has previously threatened to develop products outside of Tesla if he is unable to secure a larger stake in the company.