Core Viewpoint - Tesla shareholders approved CEO Elon Musk's nearly $1 trillion pay plan with 75% support despite recommendations from top proxy advisors to vote against it [1][2] Group 1: Pay Plan Details - The pay package consists of 12 tranches of shares contingent on Tesla achieving specific milestones over the next decade, potentially increasing Musk's stake from 13% to about 25% [2] - The first tranche is tied to Tesla reaching a market capitalization of $2 trillion, with the current market cap at $1.54 trillion; subsequent tranches are linked to increments of $500 billion up to $6.5 trillion, and the final two tranches require a market cap of $8.5 trillion [3] - Additional goals include delivering 20 million vehicles, achieving 10 million active Full Self-Driving (FSD) subscriptions, and deploying 1 million robotaxis [4] Group 2: Earnings and Operational Milestones - The plan outlines earnings milestones starting from $50 billion in annual adjusted profit, increasing to $400 billion; Tesla reported an adjusted EBITDA of $4.2 billion in Q3 [6] - Musk could potentially earn tens of billions without meeting all targets, as he could collect over $50 billion by achieving a few more attainable goals [6] Group 3: Conditions and Legal Context - The pay plan includes "covered events" that allow Musk to earn shares without meeting operational milestones, such as natural disasters and changes in laws that could affect Tesla's operations [7] - The vote followed a Delaware Court ruling that Musk's previous pay plan was improperly granted, with the matter currently under appeal [8]

Core Viewpoint - A coalition of unions and corporate watchdogs is urging Tesla shareholders to vote against a proposed pay package for CEO Elon Musk, which could grant him nearly $1 trillion in stock and increase his control over the company [1][3]. Group 1: Pay Proposal Details - Tesla's board proposed the largest ever CEO pay plan in September, stating it is necessary to retain Musk for a decade [2]. - The pay plan is set for a shareholder vote at the upcoming annual meeting [2]. Group 2: Opposition to the Pay Package - The coalition describes the pay package as "outrageous," citing concerns that Musk's political activities have harmed Tesla's brand and distracted him from his leadership role [3]. - The plan does not mandate Musk to prioritize Tesla over his political and other business interests [3]. Group 3: Advocacy and Mobilization - The coalition encourages the public to petition state treasurers and financial officers to reject the pay plan [4]. - They plan to provide resources online to help investors vote their shares or influence fund managers [4]. Group 4: Shareholder Influence - Public pension funds are significant shareholders in Tesla, and asset managers have even larger holdings, emphasizing the need for accountability from Musk and the Tesla Board [5]. - The coalition includes various organizations such as Americans for Financial Reform and the Communication Workers of America [5]. Group 5: Proxy Firm Recommendations - Major proxy firms ISS and Glass Lewis have recommended against the $1 trillion pay plan, which follows a contentious debate over Musk's previous pay package of approximately $56 billion [6]. - Tesla responded to these recommendations by highlighting the significant increase in market capitalization since the introduction of the 2018 CEO Performance Award [7].

Core Points - Institutional Shareholder Services (ISS) recommends Tesla investors vote against a pay plan for CEO Elon Musk that could grant him nearly $1 trillion in stock [1][2][3] - The proposed "mega performance equity award" is designed to retain Musk long-term and is contingent on achieving significant performance targets [2][3] - If approved, the plan could increase Musk's stake in Tesla by up to 12%, contingent on the company reaching a market cap of $8.5 trillion [3] Company Response - Tesla disagrees with ISS's recommendations, arguing that ISS has overlooked fundamental investment and governance principles [4] - The company urges shareholders to support the board's recommendations for all proposals in the upcoming proxy vote [4] Historical Context - ISS previously advised against Musk's 2018 pay package, which was valued at approximately $56 billion [5] - A Delaware Court ruled that the 2018 pay plan was improperly granted and must be rescinded due to lack of transparency [5][6] Voting Power - Musk holds at least 13.5% of Tesla's voting power, which may be sufficient to secure approval for the proposed pay package [8] - In September, Musk increased his ownership by purchasing an additional $1 billion in Tesla stock [8] Additional ISS Recommendations - ISS also recommends against granting Tesla's board authorization to invest in xAI, an AI company founded by Musk [9] - The firm suggests voting against the reinstatement of board member Ira Ehrenpreis, a close associate of Musk [9] Governance Changes - In May, Tesla amended its corporate bylaws to restrict shareholders' ability to sue for breaches of fiduciary duties, allowing only those with at least 3% ownership to initiate derivative actions [10]