Tesla's proposed $1 trillion compensation package for CEO Elon Musk is facing intense investor scrutiny, with a leading proxy adviser urging shareholders to reject what could be the largest corporate pay deal ever awarded to a company chief.
Institutional Shareholder Services (ISS) has issued a strongly worded report criticizing the plan, citing its astronomical size and potential dilution of existing investors. The ISS also expressed concerns that the structure of the package would reward partial achievement and soaring share prices, rather than meeting specific performance targets.
Tesla's board had proposed the $1 trillion compensation package in an effort to retain Musk, who has been instrumental in the company's success. However, ISS argues that the plan would "lock in extraordinarily high pay opportunities over the next ten years" and reduce the board's ability to adjust future pay levels.
Musk's record pay deal could still result in tens of billions of dollars for him even if he fails to meet many of its ambitious targets. The plan includes a series of performance milestones, including delivering 20 million vehicles and $400 billion in adjusted core earnings.
Despite ISS's concerns, Tesla's shares have risen following the announcement of the compensation package, with investors believing it would incentivize Musk to focus on the company's strategy. However, ISS's report adds pressure on Tesla's board ahead of a closely watched shareholder meeting in November.
The proxy adviser's guidance is seen as significant, given its influence over major institutional investors, including passive funds that hold large stakes in Tesla. The report has renewed scrutiny of Musk's compensation package and highlights the risks of the plan for existing shareholders.
Institutional Shareholder Services (ISS) has issued a strongly worded report criticizing the plan, citing its astronomical size and potential dilution of existing investors. The ISS also expressed concerns that the structure of the package would reward partial achievement and soaring share prices, rather than meeting specific performance targets.
Tesla's board had proposed the $1 trillion compensation package in an effort to retain Musk, who has been instrumental in the company's success. However, ISS argues that the plan would "lock in extraordinarily high pay opportunities over the next ten years" and reduce the board's ability to adjust future pay levels.
Musk's record pay deal could still result in tens of billions of dollars for him even if he fails to meet many of its ambitious targets. The plan includes a series of performance milestones, including delivering 20 million vehicles and $400 billion in adjusted core earnings.
Despite ISS's concerns, Tesla's shares have risen following the announcement of the compensation package, with investors believing it would incentivize Musk to focus on the company's strategy. However, ISS's report adds pressure on Tesla's board ahead of a closely watched shareholder meeting in November.
The proxy adviser's guidance is seen as significant, given its influence over major institutional investors, including passive funds that hold large stakes in Tesla. The report has renewed scrutiny of Musk's compensation package and highlights the risks of the plan for existing shareholders.
it just seems like a massive risk to existing investors. I mean, ISS is right on point - it's not like they're trying to screw over Musk or anything, but someone's gotta have their back. The board should be doing better than this 
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and now investors are all like "hold my beer" about losing out on billions 
iss is basically the adult in the room, telling tesla's board that hey guys, chill 
and what's up with all these performance milestones? like, you gotta deliver a whole lotta vehicles and earnings before musk gets his first dollar 
like how can you even justify $1 trillion lol idk if its genius or crazy but either way elon is gonna be set for life 
anyway hope tesla's management has a solid plan in place to make sure it pays off for shareholders 
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I'm pro-Elon and all, but if he wants to keep his job, maybe he should start by delivering on some actual promises 
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i mean, it's like, what's next? a billion dollar bonus just because the stock prices are good 
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I'm not sure what to think – part of me says "hold out for better", but another part of me thinks, "come on, it's worth the risk". 
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