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A group of Tesla investors has written a letter asking other Tesla shareholders to vote against the new pay proposal at the company’s annual shareholder meeting on November 6. The proposal provides a new compensation package for CEO Elon Musk, which could be worth around $1 trillion.
As reported by Cryptopolitan, Tesla revealed the proposed $1 trillion pay package last month. However, for Musk to access the full payout, he needs to increase Tesla’s market capitalisation to $8.5 trillion over the next decade and achieve a series of significant product milestones.
These include boosting annual earnings to $400 billion a year, building a million Optimus robots, and delivering around 12 million EVs by 2035. This translates to an average of 1.2 million a year.
According to the Tesla board, “Tesla’s Special Committee designed a performance incentive plan that completely aligns Elon’s compensation & shareholder value creation. If Elon Musk doesn’t deliver results, he receives nothing […] “We’re talking about trillions of dollars of value for shareholders + efforts that will accelerate global prosperity.”
Tesla board members have personal ties with Musk
Signatories of the letter include Tesla investor SOC Investment Group, the American Federation of Teachers, and the state treasurers of Nevada, New Mexico, Connecticut, Massachusetts, Colorado, as well as the controllers of Maryland and New York City.
The shareholder group criticized Tesla’s board for not securing a commitment from Musk, who runs several companies, to “devote his attention” to Tesla. They warned that the pay package could lead to share dilution for Tesla shareholders.
The letter said, “The Board has permitted Mr Musk to be overcommitted for years, allowing him to continue as CEO while taking time-consuming leadership roles at his other companies, xAI/X, SpaceX, Neuralink, and Boring Company.”
They also pointed to how the board most recently failed to intervene when Musk took a leadership position at the US Department of Government Efficiency (DOGE). According to them, the role had a negative impact on the company’s performance and brand.
The group of investors said that the board of directors of the EV giant isn’t independent enough from Musk and that the billionaire’s pay package’s performance criteria are vague and not as hard as they seem at first. They questioned the board’s ability to provide objective and rigorous oversight of management at Tesla, noting that directors have deep personal and professional ties to CEO Musk.
Shareholders cite poor performance
The letter also pointed to the EV giant’s volatile performance, with sales and revenue both slumping in the first half of the year amid rising competition and backlash over Musk’s political activities.
Tesla reported a 13% year-over-year decline in sales in both the first and second quarters of 2025. Through July 2025, Tesla’s sales dropped the most in France by 27%, Belgium by 58%, Sweden by 86%, Denmark by 52%, and the Netherlands by 62%.
According to reports, Tesla’s sales in Europe decreased by more than a third in the first six months of 2025. Its market share for battery electric vehicles (BEVs) went from 21.6% to 14.5%. Reports also indicate that Tesla’s battery business experienced a decline in sales, partly due to Mr Musk’s political activities.
Tesla’s car sales were 18% lower in the first half of 2025 than in the first half of 2024. Its operating income and net income plummeted by 52% and 38%, respectively. According to the group of investors, quick drops in sales and profits are signs of problems that need to be solved by a board that keeps a close eye on management and makes sure there is a full-time
Tesla EV production. Source: CNBCAccording to their reports, the company reported 497,099 total deliveries in the third quarter of this year. This is a 7% surge from last year’s 462,890 deliveries. However, Tesla saw a decline in production this quarter compared to the 469,796 vehicles produced last year.
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