Core Points - The ongoing engagement with Tesla's special committee regarding the proposed compensation plan is emphasized, indicating active discussions and involvement [1][2] - The main concern raised by Norway's sovereign wealth fund, Tesla's ninth largest shareholder, is the perceived excessive size of the proposed pay package and potential dilution of shares [4][5] - The importance of ensuring shareholders are well-informed about the compensation plan, distinguishing it from the assessments made by proxy advisers [3][4] Shareholder Concerns - Norway's sovereign wealth fund has opposed the pay plan, citing concerns over dilution and the overall size of the award despite acknowledging the value created by Elon Musk [4][5] - The fund has been a Tesla shareholder since 2011 and has seen a significant increase in share value, raising questions about their current stance [6][7] Voting Dynamics - The current voting process under Texas law allows insiders, including Elon Musk, to vote their shares, which differs from previous Delaware law [13][14] - Historical context shows that previous compensation plans received over 70% shareholder approval without including Musk's votes, suggesting potential for strong support in the current vote [14][15] Risk Management - There is a recognition of the risk that a negative vote could lead to Elon Musk reducing his involvement with Tesla, but the focus remains on securing a positive outcome [10][12] - The board is confident in their strategy and is not currently considering alternative plans, emphasizing a strong belief in winning shareholder support [11][12]

Tesla Inc. shareholders are being urged by proxy adviser Institutional Shareholder Services to vote against Chief Executive Officer Elon Musk’s $1 trillion compensation plan, adding a potential obstacle as the board works to rally investor support. Most Read from Bloomberg This marks the second year in a row that ISS urged shareholders to vote against a pay package for Musk. Musk oversees an overlapping empire of five companies: Tesla, SpaceX, xAI, Neuralink and the Boring Company. “Although one of the ...

Core Viewpoint - Tesla's share price is experiencing an increase following the announcement of a new compensation package for CEO Elon Musk, which could potentially be valued at around $1 trillion, marking it as the largest executive pay package in corporate history [1][5]. Group 1: Stock Performance - By press time, TSLA stock was trading at $354, reflecting an increase of approximately 4.5% for the day [3]. - The proposed compensation plan is expected to significantly influence investor sentiment and stock performance [5]. Group 2: Compensation Package Details - The compensation plan is structured to retain Musk for the next decade and includes ambitious performance targets, primarily focusing on the expansion of Tesla's robotaxi business and a substantial increase in market value [6]. - To fully unlock the payout, Tesla's market capitalization must rise from about $1 trillion today to at least $8.5 trillion over the next decade [6]. Group 3: Impact on Musk's Ownership - If the compensation package is fully realized, it could increase Musk's ownership stake in Tesla to at least 25%, aligning his compensation with aggressive growth targets [7]. - The plan aims to reshape Tesla's future by tying Musk's financial incentives to performance metrics [7]. Group 4: Market Expectations and Challenges - The unprecedented size of the proposed package indicates high expectations for Tesla's next growth phase [8]. - The package may also reinforce Musk's position within the company amid shareholder concerns regarding his political involvement and challenges from slowing sales and competition, particularly from Chinese manufacturers [8].