+61.27% The automaker's shareholders are set to vote on November 6 on what would be the highest compensation package ever awarded to an executive. Despite criticism of this staggering amount, the proposal is UNLIKELY to be rejected. Indeed, Tesla's board of directors fully supports the plan. Its chair, Robyn Denholm, has warned that a rejection could prompt Elon Musk to leave the company, whose market capitalization of over $1.5 trillion is partly based in part on the CEO's personality and his promises of innovation. Opponents, meanwhile, fear an excessive concentration of power in the hands of the CEO. Widespread support expected despite criticism Despite reservations, the plan is unlikely to be rejected. Since moving to Texas, Tesla has benefited from legislation that allows Musk to vote all of his shares, representing approximately 13.5% of the voting rights. He also faces no core group of dissatisfied shareholders. NBIM, the Norwegian fund manager, is currently the main shareholder to have announced its opposition. It holds only 1.12% of the capital, although this stake is currently worth $17bn (0.9% of the fund's total assets, which are calculated in real time). Conversely, Baron Capital, another major investor, has confirmed its support. The three main institutional funds (BlackRock, Vanguard, and State Street) have not yet decided. Consulting firms ISS and Glass Lewis also recommend rejecting the plan. They consider the amount excessive, point to the risk of massive payments even if the targets are not fully met, and are concerned about dilution for other shareholders. In 2018, they opposed a $56bn plan, which was ultimately approved with broad support, particularly from small shareholders. $8.5 trillion market capitalization target The new plan could offer Musk shares with a potential value of $1 trillion over ten years. Taking into account the exercise price, the net value is approximately $878bn. Tesla defends this system by explaining that its boss would receive "nothing" without a significant increase in the group's value. The maximum compensation would only be paid if ambitious targets were met, including a market capitalization of $8.5 trillion. "We recognize the value created under Mr. Musk's leadership, but we are concerned about the size of the reward, the dilution effects, and the lack of safeguards against excessive dependence on a single individual," NBIM explains on its website. NBIM also plans to vote against two of the three directors up for re-election, Kathleen Wilson-Thompson and Ira Ehrenpreis, while supporting Joe Gebbia, a board member since 2022. © MarketScreener.com - 2025