Before Tesla’s annual general meeting on Thursday, the electric carmaker is delivering one powerful message to investors: Elon Musk is worth $1 trillion. The company has launched digital ads defending his record-breaking pay package. On Votetesla.com, a promotional video shows board chair Robyn Denholm and director Kathleen Wilson-Thompson praising him while triumphant music swells. Yet not all shareholders seem ready to agree. The meeting in Austin, Texas, is shaping up as a test of loyalty to Musk himself, whose outspoken politics and erratic public image have made him one of the most divisive executives of the modern era. Musk has taken to X, his own platform, to raise the stakes, declaring that Tesla’s future “could affect the fate of civilization.” He has also amplified support from high-profile allies such as Dell founder Michael Dell, Ark Invest’s Cathie Wood, and his brother Kimbal, who sits on Tesla’s board. “There is no one remotely close to my brother,” Kimbal said, praising Elon’s leadership. “Thanks bro ❤️,” Musk replied.
Cracks in investor confidence
Many investors view the drama around Musk’s pay as a symptom of Tesla losing focus while sales slide. “What’s amazing to me is a company struggling to sell cars spends money on advertising to sell a pay package,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management. He has reduced his Tesla holdings and sharpened his criticism. “Tesla needs to refocus on its core – selling electric vehicles again,” he said.
Musk’s trillion-dollar target
The proposed deal is not a $1tn salary. It sets Musk the challenge of lifting Tesla’s market value from $1.4tn to $8.5tn. He must also lead a huge expansion of the company’s self-driving “Robotaxi” fleet, bringing one million vehicles into commercial use. That would be a dramatic turnaround after their disappointing debut. If he meets the targets, Musk would receive 423.7 million new shares, worth almost $1tn at the goal valuation. Tesla has declined to comment on its campaign to win shareholder backing.
This is not Tesla’s first pay storm. Shareholders previously approved an enormous package worth tens of billions if Musk increased Tesla’s value tenfold. He achieved that, but a Delaware judge struck down the deal in 2024, ruling that the board was too close to him personally and financially. The Delaware Supreme Court is now reviewing that case while this even bigger plan hangs in the balance.
“The strategy is familiar for Tesla, but nothing about Tesla is normal,” said Columbia Law School professor Dorothy Lund in an interview. “They’re far from a model of strong corporate governance.” She noted that campaigns to rally shareholder votes usually appear when a company fears activist investors, not over pay decisions. “I’ve never seen such an effort for executive compensation,” she said.
Both Elon and Kimbal Musk will vote on the proposal, which requires a majority to pass. Musk, already the world’s richest man, became the first half-trillionaire earlier this year.
A board on the defensive
Tesla insists it cannot afford to lose Musk. The company argues he “uniquely possesses the leadership needed to achieve its long-term mission.” In a video on Votetesla.com, Wilson-Thompson said the board worked seven months with legal and pay experts to create the deal. During last month’s earnings call, Musk played down the issue, saying he only wanted enough control to lead Tesla effectively.
But critics say the board’s role is to hold him accountable, not promote him. “A board’s duty is to protect shareholders, not campaign for the CEO,” said Yale professor Matthew Kotchen, who co-authored a study on the damage Musk has done to Tesla’s brand.
Major institutions share that view. Proxy advisers Glass Lewis and Institutional Shareholder Services told investors to reject the plan, calling it excessive and harmful to shareholders. Norway’s sovereign wealth fund, the world’s largest, agrees, as do the biggest U.S. pension fund, CalPERS, and New York State Comptroller Thomas DiNapoli, who accused Tesla’s board of failing to provide “independent oversight and accountability.”
The vote that could define Tesla
With big investors pulling away, Musk may need support from Tesla’s large army of retail shareholders, who often back him. Morgan Stanley analyst Adam Jonas called Thursday’s vote one of “the most important events” in Tesla’s history, warning that the pay plan could fail.
Meanwhile, protests continue against Tesla months after Musk’s short-lived role in Donald Trump’s administration ended in controversy. “It’s hard to imagine Musk quickly repairing the damage he’s done to this brand,” said Kotchen.
Others caution against underestimating him. “Elon Musk’s larger-than-life personality has drawn more attention to Tesla than almost any other leader,” said Jessica Caldwell, head of insights at Edmunds. “He’s become more polarising, but many still believe in his power to deliver bold, unconventional ideas,” she added.
Now the billion-dollar showdown begins — will Tesla’s shareholders decide Musk is worth the price of history’s biggest pay deal?
