Second Proxy Advisory Firm Urges Tesla Investors to Reject Musk’s $1 Trillion Compensation Package

Major Proxy Firm Opposition Grows

A second influential proxy advisory firm has recommended Tesla investors reject CEO Elon Musk’s proposed $1 trillion compensation package, according to reports reviewed by Business Insider. Glass Lewis & Co. has joined Institutional Shareholder Services (ISS) in opposing the deal ahead of Tesla’s November 6 annual meeting, creating significant headwinds for the controversial pay package.

Major Proxy Firm Opposition Grows
Substantial Shareholder Dilution Concerns
Governance and Board Independence Questions
Performance Milestones Under Scrutiny
Tesla’s Forceful Rebuttal
Divided Investor Sentiment

Substantial Shareholder Dilution Concerns

The Glass Lewis analysis reportedly values Musk’s compensation package at $141.6 billion—far above Tesla’s own $87.8 billion estimate—and warns it could dilute existing shareholders’ ownership by approximately 11.3% if fully exercised. According to the firm’s 90-page report, the package would grant Musk up to 423 million shares, representing about 12% of Tesla’s adjusted share count, if he meets market capitalization and operational milestones.

“The potential upfront and future dilutive impacts to shareholders, as well as extraordinary pay levels without commensurately exceptional performance through the achievement of even just a few tranches, warrant significant concern,” Glass Lewis stated in its analysis.

Governance and Board Independence Questions

The report raises red flags about Tesla’s board independence and oversight of executive compensation, according to sources familiar with the analysis. Glass Lewis reportedly highlighted that Musk’s compensation is being reviewed by a board that has long faced questions about its closeness to the CEO, noting directors with personal or professional ties dating back years.

Analysts suggest these governance concerns mirror those that led to a Delaware court striking down Musk’s 2018 pay package earlier this year. The court found that relationships between board members and the CEO compromised the approval process, and Glass Lewis indicates these issues remain relevant to the current proposal.

Performance Milestones Under Scrutiny

Glass Lewis questioned whether the performance milestones justify the massive potential payout, suggesting the early targets “do not appear as herculean as the size of the proposed tranches would suggest.” The firm warned that Musk could receive billions in compensation and significantly increase his ownership stake even if he achieves just one of the 12 performance tranches., according to industry experts

The package requires Musk to push Tesla’s valuation to $8.5 trillion by 2035 among other market-cap and operational milestones, but sources indicate the advisory firm believes the structure allows for substantial rewards without delivering exceptional performance.

Tesla’s Forceful Rebuttal

Tesla responded forcefully to the recommendations in a social media post, blasting both ISS and Glass Lewis as “misguided” and accusing them of using “one-size-fits-all checklists” that undermine shareholder interests. The company noted that shareholders who ignored previous recommendations from these firms benefited from Tesla’s market capitalization increasing 20-fold between March 2018 and August 2025.

“It’s a good thing our shareholders ignored those recommendations,” Tesla stated, “otherwise they may have missed out on our market capitalization soaring by 20x.”

Divided Investor Sentiment

Despite the proxy firm opposition, prominent Tesla supporter Cathie Wood of ARK Invest predicted the compensation plan would pass “decisively.” Wood reportedly accused index funds and proxy advisors of attempting to sway shareholders while doing “no fundamental research,” characterizing index-based investing as “a form of socialism.”

The growing proxy advisory opposition sets the stage for a contentious shareholder vote that will determine whether Musk receives what analysts describe as one of the largest compensation packages in corporate history.