A top proxy advisory firm, Institutional Shareholder Services (ISS), is telling Tesla investors to vote against a massive new pay plan for CEO Elon Musk that could be worth nearly $1 trillion.
The proposed “mega performance equity award” is designed to keep Musk at the company long-term. In its report, ISS acknowledged that the plan is tied to some “far-reaching performance targets” that, if met, would “create enormous value for shareholders.” However, the firm said the “astronomical grant value” and the overall design of the plan raised “unmitigated concerns.”
If approved, the pay package would be the largest ever awarded to a CEO of a public company. It would grant Musk an additional 12% stake in Tesla if the company hits a market cap of $8.5 trillion and meets other ambitious goals.
Tesla, of course, is not happy with the recommendation. In a post on X, the company accused ISS of missing “fundamental points of investing and governance” and urged shareholders to ignore the advice.
This isn’t the first time ISS has gone up against Musk. The firm previously advised investors to reject the “ratification” of his 2018 pay package, which was worth an estimated $56 billion. A Delaware court later ruled that the 2018 plan was improperly granted and must be rescinded, a decision Musk is currently appealing.
The final vote on the new pay plan will take place at Tesla’s annual shareholder meeting on November 5th. Musk himself holds at least 13.5% of the company’s stock, which could be enough to secure the approval of his own massive payday.
