Why the GER is covering this story: This story cuts to the heart of corporate responsibility, the ability of shareholders to influence corporate decisions, the evolving role of AI in the workplace and human relations, and inequality.
November 7, 2025—Tesla’s board and CEO Elon Musk have won their proposal to pay Musk $1 trillion via stock options over the next decade with over 75 percent support from shareholders.
Shortly after the company announced the results, Musk took the stage and emphasized a focus on robots. He said robots “are the future” for everything from health care and criminology. He added, however, that “things get wild from an economic point of view.”
“Every human on Earth is going to want to have their own personal R2-D2 or C-3PO,” Musk said. “So who wouldn’t?”
Musk went on to say that autonomous cars would allow people to text and drive.
Populism Over Pushback
Despite pushback from public interest groups and recommendations by proxy advisors against the plan, Musk’s popularity among shareholders prevailed at the annual shareholder meeting in Texas. Nearly half – 46 percent – of Tesla’s shares are owned by institutional investors. Retail investors make up a large portion of the remaining shares. Musk’s proportion of shares is about to double.
The pay plan would distribute a series of 12 tranches of stock options to Musk over the next ten years. If he receives all 12 tranches, he will obtain $1 trillion in stock options and own 25 percent of all Tesla’s shares. That’s a jump from the 13 percent of the company’s shares he currently owns.
Consequently, Musk would gain significant say over the company’s decisions.
2018 Pay Plan Held Up
Musk asserts he hasn’t been paid in years. His 2018 pay package is currently tied up in a legal dispute in Delaware between a shareholder and the company.
The board proposed the plan saying, Musk has demonstrated “unmatched leadership abilities time and time again.”
Other Proxy Votes: Directors and xAI
Shareholders also reelected three directors: Ira Ehrenpreis, Joe Gebbia, and Kathleen Wilson-Thompson.
Many shareholders abstained on the advisory vote on allowing Tesla to invest in Musk’s private company xAI, an artificial intelligence company. A company spokesperson said the board will consider the abstentions in their decision making process.
Value and Dilution
Currently, several ratings companies, including Schwab, CFRA, and Morningstar, give the company stock a rating of “overvalued.” For instance, Morningstar suggests the stock is trading about 50 percent higher than the recommended fair market value of $300 per share. It is currently trading around $428 a share. However, MarketEdge gave it an upgrade in October based on its technical evaluation of trading activity.
Proxy advisers ISS and Glass Lewis recommended that its clients vote against the pay plan. They noted the potential for share dilution. When a company issues more stock, that dilutes the value of existing stock. In essence, it reduces the ownership percentage of existing shares.
Norway’s sovereign wealth fund voted against the CEO performance plan, Proposal Four. Schwab voted for it. It’s unclear how BlacRrock and Vanguard votes.
