Tesla CEO Elon Musk is pushing for a $1 trillion compensation package, threatening to step down if shareholders reject it on November 6, 2025. The proposal has drawn opposition from investors like New Mexico's state funds, citing poor performance and weak targets. A Yale study also links Musk's political actions to significant lost sales for the company.
Elon Musk's proposed $1 trillion pay package for his role at Tesla has sparked intense debate as shareholders prepare to vote on November 6, 2025. The package, described in a Medium analysis as 'moronically stupid,' ties compensation to performance milestones but has been criticized for setting weak targets subject to board discretion. Musk has threatened to step down as CEO if it fails, a tactic likened to his previous fight over a denied $55 billion package. Tesla's board, including chair Robyn Denholm, has warned shareholders that rejecting it risks losing Musk, and filed SEC documents stating readiness to appoint a new CEO from within if needed.
Opposition is mounting from institutional investors. On October 28, 2025, the New Mexico State Investment Council (SIC), managing a $68 billion fund, voted 6-3 to direct its proxy, Northern Trust Asset Management, against the package and the reelection of board members Ira Ehrenpreis, Joe Gebbia, and Kathleen Wilson-Thompson. The Educational Retirement Board (ERB), overseeing $19 billion for public education workers, also opposed it through proxy advisor Institutional Shareholder Services (ISS), targeting Ehrenpreis specifically. New Mexico State Treasurer Laura M. Montoya, who pushed for the SIC vote, stated: “Pay packages, regardless of who may receive them, should be based on performance. In this case, the evidence is clear: Tesla’s operational and financial performance has been negative and highly volatile. Elon Musk’s performance at Tesla does not justify receiving the largest pay package in corporate history.” Montoya joined a coalition of state treasurers and investors in a letter urging rejection.
Compounding concerns, a Yale University study from the National Bureau of Economic Research estimates Musk's political stances cost Tesla between 1 million and 1.26 million U.S. vehicle sales from October 2022 to April 2025, with sales 67-83% lower than projected. Key factors include Musk's $300 million donation to Republican candidates before the 2024 election, his role in Donald Trump's Department of Government Efficiency (DOGE), and support for far-right parties like Germany's AfD. This 'Musk partisan effect' boosted rival electric vehicle sales by 17-22% and hindered California's net-zero emissions goals. Despite a partial rebound in sentiment as Musk refocuses on robotaxis and AI, Tesla's global sales are projected to decline 10% in 2025.
