Tesla investor support for Elon Musk's massive pay plan was lower in 2025 than in 2018

In a recent shareholder vote, Tesla's investors endorsed CEO Elon Musk's unprecedented pay plan, which could potentially reward him with around $1 trillion in stock over the next decade. However, the level of support for this package was notably lower compared to a similar plan voted on in 2018. According to a filing released on Friday, approximately 66% of the shares that were tallied in the recent vote favored the pay package. This contrasts with the 73% approval rate seen during the 2018 vote, as highlighted by Andrew Droste, head of corporate governance at Columbia Threadneedle. During Tesla's annual shareholders meeting on Thursday, the company indicated that the plan garnered 75% support among the voting shares, which included stakes held by insiders such as Musk, who owns about 15% of the company. The reduced backing comes in the wake of a challenging period for both Musk and Tesla, characterized by declining sales in the first half of the year. Factors such as Musk's controversial political comments and his involvement with the Trump administration have been cited as contributing elements to this downturn. Despite the lower percentage of approval, Droste noted that a 66% vote still reflects a solid level of support for Musk among Tesla shareholders. He emphasized that most investors view Musk and Tesla as closely interconnected, leading them to prefer backing the pay plan to mitigate the risk of his departure. The board's recommendation to approve the pay package came after its introduction in September, despite pushback from prominent proxy advisory firms like Glass Lewis and ISS, which advised shareholders to vote against it. The pay structure consists of 12 share tranches that Musk can earn if Tesla meets specific milestones within the next decade. The initial tranche will be granted if the company achieves a market capitalization of $2 trillion, a significant increase from its current valuation. Additionally, the compensation plan includes operational benchmarks alongside market cap milestones. Musk stands to secure over $50 billion by reaching some of the more accessible targets outlined in this new agreement. Notably, certain 'covered events' are integrated into the award conditions, allowing Musk to earn shares without fulfilling all operational criteria. Tesla has yet to respond to requests for further commentary on this matter.