These are the two major firms that advised Tesla investors to reject Elon Musk’s $1 trillion pay deal, and the main reason why

Two of the world’s most influential proxy-advisory firms are urging Tesla investors to vote against Elon Musk’s record-breaking compensation plan.

Why are firms against Musk’s Tesla investment?

The firms are warning that the $1 trillion package would reward the billionaire CEO far beyond reasonable performance goals and weaken corporate governance at the electric carmaker. Institutional Shareholder Services (ISS) and Glass Lewis & Co. – firms whose recommendations carry weight with large institutional investors – have both advised a “no” vote on the proposal, set to be decided at Tesla’s upcoming shareholder meeting.

As reported by Reuters, ISS argued that the size and structure of the award would give Musk vast personal wealth even if only a portion of Tesla’s growth targets are met. The group said the deal risks tying too much of Tesla’s future to a single individual, calling it “disproportionate and misaligned with performance.”

Glass Lewis was even more direct, via Business Insider, valuing the potential payout at roughly $141.6 billion – significantly higher than Tesla’s own estimate – and warning that full vesting could dilute existing shareholders’ stakes by more than 11 percent. It also questioned the independence of Tesla’s board, noting that several directors have long-standing personal and business ties to Musk.

Concerns over Musk’s Tesla commitment

Both firms highlighted concerns about Musk’s attention to Tesla given his leadership roles at SpaceX, xAI and other ventures, saying shareholders risk over-reliance on an executive whose commitments are spread across multiple companies.

The vote will test whether investor enthusiasm for Musk’s leadership can withstand scrutiny over the largest pay package in corporate history – and whether shareholders believe Tesla’s success should continue to hinge so heavily on one man.

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