Elon Musk has warned he will step down as Tesla CEO if shareholders reject his proposed $1 trillion compensation package. The threat came in response to criticism of the package's structure, which could award him billions even for below-average performance. Tesla's board defends the plan as essential for retaining Musk's leadership in AI and robotics.
Tesla shareholders are set to vote on November 6, 2025, on a new compensation package for CEO Elon Musk, potentially worth up to $1 trillion in stock options tied to ambitious milestones. These include growing Tesla's market capitalization to $8.5 trillion, delivering 20 million vehicles, deploying one million robotaxis, and achieving $400 billion in adjusted core earnings over the next decade.
The proposal follows the invalidation of Musk's previous $56 billion package by a Delaware court earlier in 2025. Proxy advisory firm Institutional Shareholder Services (ISS) recommended voting against it on October 18, 2025, calling the size 'astronomical' and warning it could grant Musk tens of billions for partial achievement of goals, even below S&P 500 averages. ISS also noted the structure limits the board's flexibility on future pay and risks diluting shareholders' stakes.
Musk responded to a former Tesla employee's criticism on X on October 19, 2025, stating: 'Tesla is worth more than all other automotive companies combined. Which of those CEOs would you like to run Tesla? It won’t be me.' The employee argued the package would underperform the S&P 500 and overpay Musk $20 billion. A Reuters report highlighted that Musk could receive $20 billion to $40 billion for market cap growth below the S&P average.
Tesla's board argues the package ensures Musk's focus on expansion into robotics and AI, with assurances his political involvement will wind down. Despite ISS's stance, Tesla shares rose after the announcement, and Musk holds 13.5% of voting power. The company criticized ISS's guidance as 'misguided' on social media.
