Elon Musk’s $1 trillion pay package will be discussed on Tesla’s board as major proxy advisory firms press shareholders to reject the deal.
If Musk secures what is the largest compensation package in corporate history, the outcome will be determined on Thursday.
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Investors should vote against the package, according to proxy firms Glass Lewis and Institutional Shareholder Services. These organizations frequently influence large passive funds, which own significant stakes in the electric car manufacturer.
With declining global sales and investor confidence, Tesla has encountered mounting challenges this year.
Tesla reported a 13.5% decline in American sales in July. As US consumers scrambled to profit from a $7,500 EV tax credit that was scheduled to expire that month, they increased 7.4 percent in the third quarter ending in September compared to the same period the year before.
However, sales worldwide are declining as well. In October, new car registrations decreased by 59 percent in Portugal, 31 percent in Spain, and 89 percent in Sweden.
Tesla’s brand is harmed by political behavior.
Musk’s political profile amplifies that tension. He was appointed head of the Department of Government Efficiency, the country’s largest employer, where he campaigned for massive layoffs.
Tesla’s reputation has been harmed by Musk’s political activism while its rivals have gained. Sales of other electric and hybrid vehicles increased by 22 percent between October 2022 and April 2025, according to a study from the National Bureau of Economic Research. According to the study, Tesla’s sales could have increased by 67 percent to 83 percent, or roughly 1 million to 1.26 million more vehicles, if Musk had avoided politics.
Robyn Denholm, the chair of the Tesla board, warned that rejecting Musk’s pay package could lead to his ouster despite these obstacles. She stated in a letter to shareholders last week that Musk’s leadership “is essential to the brand’s success.”
Tesla’s future depends on Musk’s continued involvement, according to experts.
We anticipate that Musk will receive the pay package by a significant margin in this pivotal moment. Tesla’s AI goals are largely dependent on the user. Tesla is Tesla, according to Wedbush Securities analyst Dan Ives.
Musk is the CEO of Tesla during the war, and nobody else will ever replace him. Despite Musk’s political baggage, this is Tesla’s most significant chapter of growth since the AI Revolution.
Tesla has increased its investments in AI technology. The company hopes to launch its Optimus humanoid robot technology in the late summer of this year as part of its ongoing development.
Performance indicators
Musk’s compensation depends on how well he performs. It has 12 ambitious market-cap goals, each of which calls for the company to be valued at $8.5 trillion within ten years, starting at $2.4 trillion. The current market cap for Tesla is $1.48 trillion.
Additionally, the performance indicators include deliveries made on all fronts for three straight months, with deliveries totaling 20 million vehicles, 1 million AI bot sales, and 1 million driverless robot axis. Less than 2 million vehicles were sold by the business last year.
As each milestone is reached, Musk gains additional shares. Over the course of the 10-year program, he must also continue to serve as CEO or take on a higher executive-level position.
As earlier this year he was accused of neglecting company obligations while spending time in Washington, DC, critics contend that the plan does not encourage Musk to refocus on Tesla.
“Let’s be clear: Elon Musk is already one of the wealthiest people on earth. His current stake in Tesla, which is currently worth tens of billions, should typically serve as an incentive sufficient to boost performance. Democratic New York State Comptroller Thomas DiNapoli, who controls 3.3 million shares through New York State’s pension fund, said in remarks on Monday that the idea that another significant equity award will somehow shift a man who is hopelessly distracted is illogical and contrary to the evidence.
Musk’s public image has quickly deteriorated in the face of declining sales and growing political unrest. Musk’s influence on the brand’s reputation was one reason for the decline in sales.
A Gallup poll found that Musk was viewed favorably by 43% of Americans in February and unfavorably by 47%.
With ratings of 33 percent and 61 percent, he was the most unpopular influential figure among Americans by August, trailing only Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump, who has been accused of war crimes.
Ives contends that investors are unlikely to be affected by the negative effects of Musk’s reputation.
According to Ives, “investors want Musk to be the next CEO for the next ten years, and they view optics as noise.”
Tesla did not respond to Al Jazeera’s request for comment.
Source: Aljazeera
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