- Major U.S. funds, including CalPERS, plan to vote against Elon Musk’s proposed $1 trillion compensation package at Tesla.
- Prominent Tesla retail investors have warned they may move holdings away from Charles Schwab if the brokerage’s funds continue to oppose Tesla’s management.
- The 10-year CEO compensation plan links Musk’s pay to key performance milestones, with a potential increase in his Tesla ownership stake to about 25%.
- Supporters and critics of the pay plan include large institutional investors, Tesla board members, and public figures, reflecting a divided Wall Street outlook.
- Retail investor sentiment is bearish, with some traders predicting a sharp rally in Tesla shares if the pay proposal passes.
Several major funds, including CalPERS and other large U.S. investment groups, have announced they will vote against Tesla CEO Elon Musk’s $1 trillion performance-based compensation package. The shareholders cite concerns over corporate governance and the risk of concentrating too much power in one individual. The final vote on the proposal is scheduled for Thursday.
Key voices in Tesla’s retail investor community have responded strongly. Influencers Sawyer Merritt and Jason DeBolt have publicly stated they may move their holdings out of Charles Schwab if the brokerage’s ETF funds continue to vote against Tesla’s management, including Musk’s proposed pay plan and the company’s proposed move from Delaware to Texas.
According to Schwab’s proxy-voting disclosure, the Schwab U.S. Broad Market ETF voted against both the CEO compensation plan and Tesla’s redomiciliation to Texas. The ETF supported management on other items, such as advisory pay and the audit. The disclosure shows that 1.5 million shares were cast at the June 13, 2024 meeting. DeBolt noted that as many as six Schwab ETF funds, with an estimated 7 million Tesla shares, voted against management’s recommendations at the annual meeting.
Tesla’s proposed 10-year pay package for Musk is tied to hitting goals in market value, profitability, and innovation. If all targets are met, Musk’s equity stake could reach 25%. Some institutional investors, including the New York State and City Comptrollers and advisory firms ISS and Glass Lewis, also oppose the plan. Supporters include Tesla Chair Robyn Denholm, Florida’s State Board of Administration, Ark Invest, and public figures such as Jim Cramer.
Data indicates that retail investors hold over 40% of Tesla’s publicly traded shares. While some traders expect a share price rally if the proposal passes, overall sentiment among investors remains bearish ahead of the vote. Tesla’s stock has increased 16% so far in 2025. Further updates are expected following the shareholder decision.
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