The pay package is just one of a series of measures that shareholders have already been asked to vote on by proxy ahead of Thursday’s meeting. Others include whether Tesla should move from Delaware to Texas, whether the company should tone down its tough stance on labor negotiations, and whether the company should preemptively impose a moratorium on the use of seabed minerals.
Still, none have been as divisive as Musk’s salary. Before the vote, deep divisions among investors were revealed. Tesla Chairman Robyn Denholm supported the pay package, as did billionaire investor Ron Baron. “Tesla is better with Elon,” Baron wrote in an open letter last week. “Tesla is Elon. But opponents of the deal include two influential proxy advisory groups that lead institutional investors in the vote, as well as shareholders from Nordic countries where Tesla has clashed with workers over labor rights.
Norway’s trillion-dollar sovereign wealth fund said it would vote against the pay deal, as did the country’s biggest pension fund, KLP. “While we recognize that the company has grown significantly and successfully over the period under review, we still recognize that the overall valuation remains too high,” Kiran Aziz, KLP’s head of responsible investments, told WIRED, adding that the fund will vote in favor of the proposal challenging Tesla , to participate in work negotiations. “Recently [dispute] between Tesla and the company’s employees in Sweden, as well as Tesla’s history of allegations of interfering with workers’ rights, are of great concern and show that the company needs to do better in this area.
There was intense lobbying behind the scenes of the vote. Tesla paid for ads on Musk-owned Google and X and told investors to “protect your investment” and support the proposal, according to the company’s filing with the Securities and Exchange Commission. In April, Tesla also launched a website urging shareholders to vote against the Delaware court ruling and support the payout package. “The court’s decision, if implemented, means that Elon will receive no compensation for the tremendous achievements that have brought significant returns to shareholders in less than six years,” the website says.
“This is the biggest advertisement I can remember of any proxy solicitation,” says Robert Anderson, a professor at the University of Arkansas School of Law. He believes that the Musk effect – the CEO’s ability to attract endless publicity – has contributed to this situation. But the pay package and the proposed Texas move are unprecedented in the business world, he adds. “Be it [of] those things would be significant enough in themselves even if he wasn’t a public figure.”
The vote will be decided by a mix of institutional investors as well as an unusually large cohort of retail investors who control around 44 percent of the business. There is concern among shareholders that if Musk doesn’t get his compensation, “his focus might shift a little bit more to some of his other businesses,” Anderson says. Musk has managed to juggle multiple businesses for years, but has become more distracted since acquiring Twitter and renaming it X. There, his visible turn to right-wing politics won him new fans and left some old ones behind.
Whatever happens this week, Tesla and Musk may appear a little less superhuman. For years, the two have insisted that Tesla is a Silicon Valley-style startup scrap metal company. “We should be considered an AI or robot society,” Musk told investors — or voters — in April. “If you value Tesla as just a car company … fundamentally, it’s just the wrong framework.”