- Schwab Asset Management announced it will vote for Elon Musk’s 2025 CEO Performance Award at the upcoming Tesla shareholder meeting.
- Several institutional investors, including CalPERS and the New York State and City Comptrollers, have taken a stand against Musk’s proposed compensation package.
- The proposed pay package could give Musk a stake of up to 25% in Tesla if performance and innovation benchmarks are met.
- Some retail investors predict the shareholder vote will pass, but they remain cautious and believe Tesla stock could fall below $300.
- Tesla shares have increased 10% so far in 2025, despite growing division among its investors over the CEO’s compensation.
Schwab Asset Management stated on Tuesday that it will vote in favor of Elon Musk’s proposed 2025 CEO Performance Award during Tesla’s high-stakes shareholder meeting this week. The company referred to the decision as being in line with shareholder interests and focused on promoting shareholder value.
In an official statement, Schwab Asset Management described its proxy voting approach as “thorough and deliberate,” emphasizing the use of internal guidelines for voting decisions. “We firmly believe that supporting this proposal aligns both management and shareholder interests, ensuring the best outcome for all parties involved,” the firm said. The company pointed out that it relies on its own assessments of board composition, strategy, risk management, and transparency rather than following recommendations from proxy advisory firms like Glass Lewis and ISS.
Opposition to the award remains strong among major institutional stakeholders. The California Public Employees’ Retirement System (CalPERS), which owns about five million shares of Tesla, declared its intent to vote against the plan, calling it excessive and expressing concerns over a concentration of power, according to Bloomberg. Other opponents include the New York State and City Comptrollers, SOC Investment Group, and proxy advisers ISS and Glass Lewis. In contrast, Tesla Chair Robyn Denholm, Ark Invest’s Cathie Wood, Wedbush analyst Dan Ives, and CNBC’s Jim Cramer have voiced their support for Musk’s plan, highlighting that the CEO will only benefit if shareholders receive substantial returns.
The 10-year compensation package is performance-based, with Musk’s potential payout tied to Tesla’s market capitalization, profitability, and innovation targets. Achieving all milestones could result in Musk’s ownership stake rising to approximately 25%.
Despite anticipation around the vote, retail investors remain cautious. Some expect the proposal to pass but warn that Tesla shares could still face downward pressure, with several predicting prices could drop below $300 amid ongoing market volatility.
Since the start of 2025, Tesla’s stock price has risen by 10%, even as debate continues among both retail and institutional investors over the CEO’s compensation proposal.
