EV maker Tesla (TSLA) is facing pushback from Institutional Shareholder Services (ISS), a major proxy advisory firm, which is urging investors to vote against CEO Elon Musk’s massive $1 trillion pay package. The firm says it’s concerned that the plan doesn’t guarantee Musk will focus on Tesla instead of his other companies. ISS also criticized the size and structure of the package by saying it raises “unmitigated concerns” about how it was designed.
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For context, Tesla’s board introduced this updated compensation plan in September, with the hope of motivating Musk to remain engaged with Tesla for the next decade. To earn the full payout and gain more voting power, Musk must meet aggressive goals like growing Tesla’s market value to at least $8.5 trillion, as well as expanding its robotaxi and robotics businesses. If achieved, Musk’s ownership would rise to 25%. Interestingly, Musk has previously stated that he may develop products outside of Tesla if he doesn’t gain more control.
Nonetheless, the plan will be voted on at Tesla’s annual shareholder meeting on November 6. While proxy firms like ISS and Glass Lewis influence institutional investors, they don’t make the final call. In fact, shareholders approved a similar 2018 pay package despite both firms opposing it, although that plan was ultimately struck down in 2024 by a Delaware judge who said Musk had too much influence over the process. ISS also advised against letting Tesla invest in xAI after calling the idea unusual and noting that Musk had encouraged shareholders to bring it up.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 16 Buys, 13 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $366.35 per share implies 16.8% downside risk.
