Institutional Shareholder Services (ISS), a leading proxy advisory firm, has recommended that Tesla shareholders reject a proposed compensation plan for Elon Musk that could potentially pay him over $1 trillion within the next decade. The plan aims to incentivize Musk to dedicate his time and attention solely to Tesla, but ISS raises concerns about its design and implications.

The compensation package is structured to retain Musk and ensure his focus remains on Tesla amidst his other business interests. However, ISS notes that the plan lacks specific provisions to guarantee Musk’s commitment to Tesla, which could dilute the intended effectiveness of the award. Without clear restrictions, the risk exists that Musk might prioritize other ventures over Tesla, undermining the plan’s primary goal.

Critics also highlight the astronomical value of the proposed grant, which involves issuing an immense number of shares that could significantly dilute the holdings of existing shareholders. ISS questions whether such a colossal award is necessary, especially considering Musk’s substantial 19.8 percent ownership stake in Tesla. The advisory firm suggests that the award may not be justified or appropriate to further align Musk’s interests with those of the company.

As Tesla prepares for a likely shareholder vote on this compensation plan, the debate underscores concerns about executive pay, shareholder value, and corporate governance. Investors and observers alike are closely watching the outcome, which could set a precedent for executive compensation practices in high-profile tech firms.

Ethan Cole

I'm Ethan Cole, a tech journalist with a passion for uncovering the stories behind innovation. I write about emerging technologies, startups, and the digital trends shaping our future. Read me on x.com