Joining in the push back against Tesla’s proposed $1 trillion pay package for CEO Elon Musk, proxy adviser Institutional Shareholder Services (ISS), urged shareholders to vote against the plan on November 6, Bloomberg reported.
It added that this is the second year in a row that ISS has opposed a pay package for Elon Musk, and urged shareholders to vote against it.
Why is ISS opposing the $1 trillion compensation for Elon Musk?
Among other reasons, ISS on October 17 expressed concern over Elon Musk’s split attention between his five businesses, which include Tesla — the other four being Neuralink, SpaceX, the Boring Company and xAI.
In a guidance issued to shareholders ahead of the vote on November 6, ISS said that while the sky-high pay package is designed to retain Elon Musk at Tesla and keep his attention on the electronic vehicle (EV) maker, “there are no explicit requirements to ensure that this will be the case”.
It further cited “unmitigated concerns” with the plan’s magnitude and design, the report added.
‘ISS completely misses fundamental points…’ says Tesla
In a post on Elon Musk-owned social media site X (formerly Twitter), Tesla posted a response to ISS’s stance on the hefty compensation plan, and urged shareholders to back its recommendations.
“ISS once again completely misses fundamental points of investing and governance. They recommended against compensation that shareholders have voted on twice before (and that Elon has already earned), as well as the 2025 CEO Performance Award (where Elon receives nothing unless shareholders win big),” the company’s official account posted.
It called ISS’s recommendation as “unfounded and nonsensical”, and claimed that this “proves how disconnected from reality they are”.
“As Tesla’s longest-tenured independent director, Ira has created a governance framework that has allowed Tesla to achieve an astonishing TSR increase of ~39,000% during his tenure. He embodies our high-engagement Board – with hands-on leadership + effective governance with a focus on long-term value,” it added.
Tesla urged, “It’s easy for ISS to tell others how to vote when they have nothing on the line. Vote with Tesla on ALL proposals.”
Elon Musk’s $1 trillion Tesla pay plan sparks investor backlash
On October 2, Tesla investors, including state officials, also opposed Tesla’s $1 trillion pay package for Elon Musk, Forbes reported. Shareholders urged other investors to reject the pay package at Tesla’s annual shareholder meeting on November 6, as per the report.
The letter, signed by prominent investors, including the SOC Investment Group, and American Federation of Teachers; the state treasurers of Nevada, New Mexico, Connecticut, Massachusetts, Colorado and the comptrollers of Maryland and New York City, accused the board of “harming Tesla’s reputation” in their fight to retain Elon Musk.
Tesla shareholders to vote on November 6
Tesla shareholders will vote on the pay package at the annual meeting on November 6.
Notably, ISS and fellow proxy firm Glass Lewis both advised shareholders to also reject Elon Musk’s 2018 pay deal, where around 75 per cent of investors still supported the package.
In 2024, a Delaware judge struck down that plan after finding Elon Musk had undue influence over the process and the board had conflicts of interest. The world’s richest person later cited the pay dispute as part of the reason why Tesla shifted its corporate home to Texas from Delaware.
Elon Musk and Tesla resumed their legal fight to appeal the ruling, this time before the Delaware Supreme Court on October 15.
(With inputs from Bloomberg)
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