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An influential alliance of Tesla investors and representatives of US state pension funds is calling on shareholders to vote against a new remuneration package for CEO Elon Musk that could potentially be worth one trillion US dollars. In an open letter [PDF], the group led by the SOC Investment Group also calls for the three Supervisory Board members Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson to be voted out of office. The main points of criticism: declining company performance and insufficient oversight by the Supervisory Board.
Lack of oversight and declining performance
The board's relentless endeavours to retain the CEO at all costs had damaged the company's reputation, the letter states. This has led to excessive remuneration for executives and delayed progress on strategically important goals such as fully autonomous driving (Level 5). The authors of the letter assess Tesla's operational and financial performance since the last annual general meeting as negative and volatile.
While the global market for electric vehicles is expanding, growing competition from manufacturers such as BYD as well as American, European, Japanese and Korean companies has led to a divergence between Tesla's sales figures and market growth. In the first half of 2025, Tesla's global sales fell by 13 per cent compared to the previous year. In Europe, sales even fell by more than a third in the first half of the year, causing the market share for battery electric vehicles to fall from 21.6 per cent to 14.5 per cent. In addition, reports suggest that Tesla's battery business is also experiencing a decline in sales, partly due to Musk's political activities.
According to investors, these declines in sales correlate with stagnating revenues and falling profits. After an annual growth rate of 32 per cent between 2019 and 2023, Tesla's revenue grew by only one per cent in 2024. In the first half of 2025, turnover in the Automotive division was 18% below the previous year's level, while the operating result and net profit fell by 52% and 38% respectively. Investors conclude that these rapid declines require a supervisory board that exercises strict control and ensures a full-time CEO.
A supervisory board without independence
Investors accuse the Supervisory Board of being compromised in its ability to objectively monitor management. The majority of directors have close personal and professional ties to CEO Musk. These relationships have enabled a culture in which the board consistently allows Musk to act unquestioningly, even when his actions are detrimental to the value of the company and its shareholders.
The exceptionally high remuneration of the directors further undermines the impartiality of the board, the group argues. Robyn Denholm, Chair of the Supervisory Board, whose average annual remuneration amounted to USD 62 million, serves as a prime example – almost 200 times the average remuneration of a director in the S&P 500. A court ruling recently forced much of the board to repay USD 920 million in remuneration deemed excessive.
Criticism of the billion-dollar remuneration plan
According to the letter, the "2025 CEO Performance Award" to be voted on is modelled on the controversial 2018 remuneration plan. It could award Musk share options worth up to one trillion US dollars if a series of targets are achieved over the next ten years. Investors criticise the associated performance targets as vague, unambitious and subject to the discretion of a biased supervisory board.
For example, the target of 20 million vehicles delivered includes the approximately 7.5 million units already sold, which means that the annual target is lower than the deliveries in 2022, 2023 and 2024. The target of 10 million active subscriptions for fully autonomous driving (FSD) does not require the service to ever achieve actual Level 5 autonomy without driver monitoring. Furthermore, the term "subscription" is not defined and could also include one-off sales, whereby Musk could lower the price to achieve the target more easily. The target of one million "bots" delivered is similarly unclear: What counts as a "bot" is just as undefined as whether robots manufactured by other companies could also be included.
Musk's sideline activities and dilution of shareholder shares
Investors criticise the Supervisory Board for failing to demand Musk's full focus on Tesla. For years, the CEO has been allowed to take on time-consuming management roles in his other companies such as xAI/X, SpaceX, Neuralink and the Boring Company. Recently, the board did not intervene when Musk took on a leadership position in the US Department of Government Efficiency (DOGE). The letter also refers to reports that Musk misappropriated Tesla resources such as personnel and computing power for his companies X and xAI.
The proposed compensation package does not require Musk to focus his time on Tesla. Investors warn of a significant dilution of existing shareholders' stakes. If all targets are met, Musk's share of voting rights could rise from 13.6 per cent to up to 28.8 per cent. This would significantly reduce the influence of independent shareholders and deprive them of one of their last opportunities to have a significant influence on corporate strategy.
Demands for deselection and reactions
The letter culminates in a call for the removal of directors Ira Ehrenpreis, Kathleen Wilson-Thompson and Joe Gebbia. Ehrenpreis has been on the board for 18 years and has a close friendship with Musk. Wilson-Thompson has amassed an extraordinary fortune through her board service and played a key role in approving Musk's compensation. Joe Gebbia is also a friend of Musk and shares responsibility for risk management as a member of the audit committee.
At the same time, New York State Comptroller Thomas P. DiNapoli announced that the New York State Pension Fund would also vote against the proposal. DiNapoli explained that Musk's significant stake in Tesla has not led him to focus on the company and that the new package continues to disproportionately favour him over all other shareholders.
Tesla countered on Platform X by saying the plan fully aligns Musk's compensation with shareholder value creation. If Musk does not deliver results, he receives nothing.
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