Tesla's Board Warns Shareholders: Approve Elon Musk’s $1 Trillion Pay Package or Risk His

Tesla, Inc.’s board of directors is making an urgent appeal to its shareholders: vote in favour of CEO Elon Musk’s proposed $1 trillion compensation package, or the company may lose him. 

In a letter sent Monday, board chair Robyn Denholm described this vote as "a fundamental question" for investors: do they want Musk to remain at the helm and drive Tesla’s push into autonomous technology, robotics, and artificial intelligence, or not?

10 days until our Annual Meeting on November 6

Watch Board Chair Robyn Denholm on @CNBC explain why this vote is so critical to Tesla’s futurehttps://t.co/t1LJJAiGS8

— Tesla (@Tesla) October 28, 2025

The package and what’s at stake

The proposed compensation plan would grant Musk 12 tranches of stock options tied to ambitious performance milestones: among them a market capitalization target of $8.5 trillion and major advances in autonomous driving and humanoid robotics. 

Denholm stressed in her letter that Musk’s leadership is "critical" to Tesla's future and warned that without alignment of incentives the company risks losing his "time, talent and vision."

Pushback and governance concerns

Despite the board’s urgency, the package has drawn heavy criticism. Proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis have advised shareholders to vote against the plan, citing concerns over shareholder dilution, governance and oversight.

One proxy firm that partially backed the plan flagged a key worry: if Musk meets all the targets, his ownership stake could rise significantly, potentially undermining the influence of other shareholders. 

Why the board is making this appeal

Tesla’s leadership believes Musk’s departure would create a vacuum the company is not ready to fill. Denholm stated there is “just not anybody, either inside or outside the organisation, that is Elon today.” 

The board said it examined alternative ways to secure Musk’s commitment without such a large payout, but found no viable options. 

Tesla is at a critical inflection point. We need your vote ahead of our 2025 Annual Meeting on November 6.

Tesla shareholders, the owners of our company, will soon receive their control numbers and voting instructions from their brokers. This will enable you to vote.

We are…

— Tesla (@Tesla) September 18, 2025

What happens next

Shareholders will vote on the pay package at Tesla's annual meeting scheduled for November 6. The outcome is seen as a potential turning point for the company’s leadership and governance. 

If the package is rejected, Tesla may face a leadership shake‑up and a loss of investor confidence. If it’s approved, Musk’s incentives will be firmly tied to the kind of long‑term growth the board is betting on, but at the risk of further governance scrutiny.