Take Back Tesla Urges Shareholders to Reject Musk’s $56 Billion Pay Package

As Tesla prepares to release its quarterly earnings report, a coalition of labor unions and corporate governance watchdogs is intensifying scrutiny on the company’s leadership and executive compensation practices. The group, including the American Federation of Teachers and Public Citizen, has launched “Take Back Tesla,” a campaign aimed at influencing shareholder votes against a proposed pay package for CEO Elon Musk valued at nearly $1 trillion in stock. This immense compensation plan, if approved, would also significantly expand Musk’s control over the electric vehicle and technology giant.

Tesla’s board initially proposed the pay package in September, arguing that its unprecedented size was both appropriate and necessary to secure Musk’s commitment to the company for the next decade. The proposal is slated for a shareholder vote at the upcoming annual meeting.

The “Take Back Tesla” campaign challenges the proposed compensation as “outrageous,” citing concerns that Musk’s increasingly visible political activities have not only damaged the Tesla brand but also diverted his focus from core leadership responsibilities. The campaign emphasizes that the proposed pay structure lacks mechanisms to ensure Musk prioritizes Tesla over his other business interests or political endeavors.

The campaign also targets state treasurers and other financial officers who oversee large public funds invested on behalf of workers and retirees, urging them to reject the proposed pay package. The coalition plans to provide resources to educate investors on how to vote their shares or influence fund managers responsible for voting on their behalf.

“Public pension funds are significant shareholders in Tesla, and the asset managers who invest those funds have even larger holdings,” the Take Back Tesla website asserts. “That’s our money, and we should tell the people who invest it for us that we want them to vote to hold Musk and Tesla Board members accountable.”

Other organizations participating in the coalition include Americans for Financial Reform, the Communication Workers of America, corporate watchdog group Ekō, People’s Action, and Stop the Money Pipeline.

Notably, leading proxy advisory firms ISS and Glass Lewis have already advised against approving the $1 trillion pay package. Their recommendations come amid ongoing legal challenges to Musk’s previous 2018 compensation plan, which was valued at approximately $56 billion in stock at vesting. This earlier plan was voided by the Delaware Court of Chancery last year.

In response to the ISS and Glass Lewis recommendations, Tesla argued that these firms have consistently opposed Tesla’s proposals since the introduction of the 2018 CEO Performance Award. The company also highlighted the significant increase in its market capitalization since March 2018, suggesting that shareholders who sold their shares would have missed out on substantial gains.

The Delaware Court of Chancery ruled that Tesla’s 2018 compensation plan was improperly granted, citing that critical details were withheld from shareholders and that Musk exerted undue influence over board members, compromising fair negotiations. Musk has appealed this ruling to the Delaware State Supreme Court, seeking to reinstate the 2018 pay package.

Around the time the 2018 plan was rescinded, Musk stated his unease about leading Tesla in AI and robotics without holding approximately 25% voting control. The new pay plan would increase his stake by 12% over the next decade, potentially addressing these concerns.

Musk’s existing ventures, including the AI startup xAI founded in March 2023, and his commitment to running Tesla for at least five more years, add layers of complexity to the debate. Some analysts suggest that a substantial stake in Tesla could incentivize Musk to prioritize the company’s long-term strategic interests, particularly in the competitive AI landscape where Tesla aims to integrate advanced AI capabilities into its vehicles and energy products.

New York City Comptroller Brad Lander, responsible for overseeing a $300 billion pension fund, expressed his strong opposition to the pay package, urging other public fiduciaries to follow suit.

“Most of the time we’ve held Tesla stock, it has been a solid investment, it’s grown over time, and that’s why we haven’t chosen to dump it,” Lander stated. He added that he prefers to “hold on to it and participate in shareholder engagement to address the concerns we have.” Lander manages funds holding approximately $1.1 billion worth of Tesla shares as of August.

Lander views Tesla’s board as “insufficiently independent” and criticizes Musk for being an “absentee CEO.” He also highlighted the company’s underperformance in achieving key milestones related to robotaxis and self-driving technology, areas that are critical to Tesla’s future growth prospects.

While Tesla’s stock has recently rebounded, it continues to underperform its tech peers and the broader market indices like the S&P 500 and Nasdaq in 2025, reflecting investor concerns.

“Musk has been an inconsistent CEO at best,” Lander concluded, “and the pay package is like a ransom attempt after volatile stock performance and destroying consumer confidence.”

Tesla is scheduled to announce its third-quarter results after market close on Wednesday. Analysts are anticipating revenue growth of 4.7% year-over-year, reaching $26.37 billion, according to LSEG data. This expectation follows two consecutive quarters of year-over-year revenue declines, underscoring the pressure on Tesla to demonstrate sustained growth in a challenging market environment given increased competition and fluctuating demand signals.