Tesla’s board is set to vote on CEO Elon Musk’s $1 trillion pay package as major proxy advisory firms urge shareholders to reject the deal.
The vote is scheduled for Thursday and will determine whether Musk secures the largest compensation package in corporate history.
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The proxy firms are Glass Lewis and Institutional Shareholder Services Recommend both Investors vote against the package. These companies often influence large passive funds that have significant stakes in electric carmakers.
Tesla has faced mounting challenges this year, with global sales declining and investor confidence faltering.
In July, Tesla A Sales in the United States fell 13.5 percent. They jumped 7.4 percent compared to the third quarter ended in September US consumers scrambled to take advantage of a $7,500 EV tax credit set to expire that month.
However, global sales are also declining. New car registrations fell 89 percent in Sweden, 31 percent in Spain and 59 percent in neighboring Portugal in October.
Political moves hurt the Tesla brand
That tension is exacerbated by Musk’s political profile. A former aide to US President Donald Trump, he was named head of the Department of Government Efficiency, where he advocated for massive layoffs in the federal workforce, the largest employer in the US.
Musk’s political activism has boosted Tesla’s brand over its rivals. According to a study by the National Bureau of Economic Research, between October 2022 and April 2025, sales of other electric and hybrid cars have increased by 22 percent. The study estimates that if Musk had stayed out of politics, Tesla sales would have increased by 67 to 83 percent — the equivalent of roughly 1 million to 1.26 million additional vehicles.
Despite these headwinds, Tesla’s board chairman is Robin Denholm Denied warning The pay package could be a threat to Musk’s departure. In a letter to shareholders last week, she said Musk’s leadership was “critical to the brand’s success”.
Analysts agree that Tesla’s future depends on Musk’s continued involvement.
“It’s a quick moment that we expect Musk to get a pay package with a big margin. Musk is key to Tesla’s AI ambitions. Musk is Tesla and Tesla is Musk,” Wedbush Securities analyst Dan Ives told Al Jazeera.
“Musk is a wartime CEO, and nobody else at Tesla will ever fill his shoes. (This is) the most important chapter for Tesla to grow with the AI revolution, despite Musk’s political baggage.”
Tesla has doubled its investment in AI technology. It is building its Optimus humanoid robot technology, which the company hopes to launch late next year.
Performance metrics
of musk Pay package depends on his performance. It includes 12 ambitious market-cap targets, which would require the company to be valued at $8.5 trillion over a decade, starting at $2 trillion. Tesla’s market cap is currently $1.48 trillion.
Performance metrics include 20 million vehicle deliveries, 1 million AI bot sales and 1 million driverless robotaxis during that period, with deliveries on all fronts for three consecutive months. Last year, the company sold just under 2 million vehicles.
Musk earns additional shares upon completion of each milestone. He must remain CEO or hold another executive-level role during the 10-year program.
Critics argue that the plan does not encourage Musk to refocus on Tesla, as he was accused of neglecting company responsibilities during his time spent in Washington, DC earlier this year.
“Let’s be clear: Elon Musk is already one of the richest people in the world. His existing stake in Tesla, (which is worth) billions of dollars, should generally be enough of an incentive to boost performance. The idea that another big equity award would refocus a person desperately distracted,” New York and New York’s evidence is both a contractionary configuration. Thomas DiNapoli, who controls 3.3 million shares through New York State’s pension fund, said in comments Monday.
Musk’s public image has rapidly deteriorated due to declining sales and growing political controversy. One factor cited for the decline in sales is Musk’s influence on the brand’s public image.
In February, a Gallup poll found that Musk was viewed favorably by 43 percent of Americans and 47 percent unfavorably.
As of August, he was ranked as the most unpopular influential person among Americans, with a 33 percent favorable rating and 61 percent unfavorable rating — behind only U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu, who has been indicted for war crimes.
However, Ives says, the damage to Musk’s image is unlikely to sway investors.
“Investors want Musk as CEO for the next decade, and they see the optics as sound,” Ives said.
Tesla did not respond to Al Jazeera’s request for comment.
On Wall Street, Tesla stock was up 4.3 percent at $463.79 as of 2 p.m. in New York. It has increased by 84.4 percent in the last year.