Securities Regulation Daily Wrap Up, EXECUTIVE COMPENSATION—Tesla shareholders urged to reject Musk pay package, (Oct 15, 2025)

By R. Jason Howard, J.D.

Musk could see an extraordinary windfall, commonly reported to be $1 trillion in shares.

The Comptroller of the City of New York, on behalf of the New York City Employees’ Retirement System, the New York City Teachers’ Retirement System, and the New York City Board of Education Retirement System, has sent a Notice of Exempt Solicitation pursuant to Rule 14a-6(g) to Tesla shareholders urging that they oppose the reelection of three directors, the Amended and Restated 2019 Equity Incentive Plan, and the 2025 CEO Performance Award at Tesla’s annual meeting on November 6, 2025.

The letter to Tesla shareholders highlights Tesla’s declining performance, the lack of board independence, poor oversight by Tesla’s board indicating board capture, and an erosion of shareholder rights as reasons for shareholders to elect new board members and reject the incentive plan and the performance award because approval of those items “is not in the economic or financial interest of Tesla shareholders.”

The letter explains that Tesla’s declining performance demonstrates and need for better oversight and cites to the extraordinary level of director compensation that may further compromise the board’s impartiality, including the fact that “average director compensation in the S&P 500 in 2024 was just over $327,000 but one Tesla Board member's average compensation per year has been $62 million, which is almost 200 times the compensation of the average S&P 500 director.”

The letter further explains that Tesla’s board is seeking approval for changes to the 2019 Equity Plan which would allow Elon Musk to gain increased control of the company at a discount. The Comptroller and other signatories suggest that if Musk wants greater voting power in Tesla, “particularly as the world’s wealthiest person, he could buy more shares on the open market, as he has recently done.”

Similarly, the letter explains that the 2025 performance award “lacks rigor and allows for excessive board discretion,” and purports to “establish demanding operational and financial targets for Mr. Musk, in exchange for an extraordinary windfall, commonly reported to be $1 trillion in shares,” but the Comptroller notes that the board has adopted “performance targets that are in many cases vague, undemanding, and subject to significant discretion by what we believe is a non-independent Board.”

The letter concludes by stating that Tesla “is in need of truly independent board oversight of the CEO and better aligned pay practices,” and urges shareholders to vote against all directors, the Amended and Restated 2019 Equity Incentive Plan, and the 2025 CEO Performance Award.

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