October 28, 2025 • 9 mins
Tesla’s board just asked shareholders to approve a performance award that could pay Elon Musk up to $1 trillion. I break down the letter from Robyn Denholm, the proxy pushback from ISS and Glass Lewis, the Delaware overhang, and the dilution math from opposition filings, then map the vote timeline and what each outcome means for control and strategy.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Hey everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss.
The Critical. Crossroads.
That shape SpaceX. Tesla X, The Boring Company and
Neurolink. I'm your host, Will Walden.
Late Monday, Tesla board chair warned shareholders that Elon
Musk could walk away from the company if they reject a new
(00:24):
compensation plan worth up to nearly $1 trillion.
The letter set the stakes for a high pressure vote that closes
on November 5th and leads into Tesla's annual meeting on
November 6th. In this episode, I'll unpack
what the board asked for, why itchose this moment, and how the
(00:44):
payout structure frames Tesla's next decade.
Now, what question sits at the center of this fight?
The board's message leaned on a simple claim that Musk needs
stronger incentives and influence to drive Tesla's push
into autonomy and robotics. I'll explain how the proposal
ties his reward to hard performance targets.
(01:05):
Over about. 7 1/2 years and while outside advisors see the
math still creates heavy dilution for current holders.
Now I'm your guide for this breakdown because I cover these
votes, these governance fights in these capital structures in
plain English every single day. Now, in this episode, I'll also
addressed what history from lastyear's pay saga tells us about
(01:27):
how this might end up. Now we're talking about a board
backed push to approve a record scale CEO compensation plan.
And the plant arrives days afterMusk told investors he will not
pour himself into building a humanoid robot in an autonomy
stack without what he views as adequate control.
(01:50):
And the calendar now compresses every argument into the next 10
days of voting. Tesla Chair Robin Denholm told
investors that failing to pass the package creates a real risk
that Musk reduces his time at Tesla.
She framed the vote as a fundamental choice about whether
investors want to keep Musk in the CEO role and motivate him to
(02:13):
scale autonomy and the Optimist program.
That framing set a clean binary for a dispersed shareholder base
and now includes many index funds in retail voters.
And the proposed package would reach nearly $1 trillion only if
Tesla clears a ladder of aggressive performance
(02:35):
milestones over roughly 7 1/2 years.
You know the structure mirrors the company's habit of trying
compensation to market cap and operational targets rather than
salary and cash bonuses. That design makes the headline
number huge while making the actual payout contingent on
extraordinary execution. And Musk told investors that he
(02:58):
will not feel comfortable building a large scale robot
program and autonomy platform ifhe lacks strong influence
through equity ownership. And he worries that work he
leads today could be derailed later if his control weakens.
So he wants equity that secures A durable voice.
That rationale connects the pay plan to a specific product road
(03:20):
map rather than a general rewardfor past performance.
Now today, Musk owns about 15% of Tesla, which already gives
him heavy influence but not a firm lock out of control.
The new grant would push controldynamics further toward him if
milestones hit, which can comfort some investors who value
(03:43):
continuity over leadership. And it can alarm others who
price checks and balances. Shareholders therefore must
parse control drift as much as dollar figures.
Now, 2 powerful proxy advisors, ISS and Glass Lewis, urge
shareholders to vote against theplan on size and dilution
(04:06):
concerns. Several state treasurers and
investor groups also urged a no vote to question the board's
oversight of Musk and long term value delivery.
These recommendations matter because many institutions follow
them or use them to justify their own votes.
Last year, a Delaware court voided Musk's roughly $55
billion reward after finding flaws in the process and the
(04:29):
board's independence, even though shareholders had approved
the plan twice. Tesla has appealed to the
Delaware Supreme Court and has moved its incorporation to
Texas, which resets the legal backdrop away from Delaware's
deep case law. Now, legal history hovers over
this new vote and feeds skepticism about governance.
Quality in the board's current letter reprises last year's
(04:52):
central threat that Tesla could lose Musk if investors do not
endorse the compensation structure.
The approach worked in June, when shareholders backed the $55
billion package after a heavy campaign even as litigation
continued. And the board now appears to
rely on the same fear of losing the CEO to carry a much larger
plan over the line. Musk escalated the rhetoric on
(05:14):
the latest earnings call by attacking the proxy advisors
with inflammatory language and paying them as hostile to
Tesla's mission. That posture seeks the frame the
vote as a choice between builders and gatekeepers, which
can energize loyal investors canalso harden resistance among
institutions that value governance norms.
(05:35):
Also, the tactic keeps media attention on the vote during the
short window when balance arrive.
You know the calendar now controls the pacing.
Shareholders can vote through November 5th, and Tesla plans to
share preliminary results at theNovember 6th annual meeting.
That schedule leaves limited time for new disclosures or
sweeteners that could change minds.
(05:56):
And the core financial question asks whether the incremental
value must can unlock an autonomy energy and robotics
exceeds the dilution and governance cost of this grant.
Now I bottled this by comparing the potential market cap pass
that clear the milestones with the ownership shifts that come
with new stock issuance. The answer depends on credible
(06:17):
timelines for FSD revenue optimist commercialization and
energy storage growth. And each line item carries
technical and also regulatory risk.
And the governance question askswhether this board can oversee
the CEO while holding him central to the plan.
The Delaware ruling last year raised doubts about board
(06:38):
independence and process quality, which investors now
must weigh against Tesla's record of equity linked
incentives. And the Texas incorporation move
adds another variable because itchanges the form and doctrine
for future disputes. The strategy question asks how
much of Tesla's valuation already prices in the future
(06:59):
must describes. If the current price already
assumes high margin autonomy andhumanoid robotics to scale, then
the upside that would justify the award narrows.
If the price still leans on EV and energy fundamentals, then
incredible autonomy breakout could deliver enough value to
offset any dilution now. The communication strategy from
(07:20):
the board also carries risk. Repeating last year's threat can
persuade some holders, but it can fatigue others who want
fresh reasoning, clear milestones, and tighter
guardrails. I would advise the board to
publish a granular milestone table, explicit dilution bands
under different price paths, anda sunset clause tied to defied
(07:42):
autonomy adoption thresholds. And the near term market impact
will hinge on 2 signals. First, early vote totals that
leak to large holders can move sentiment into the meeting.
Second, any fresh commentary from the earnings call,
follow-ups or an updated proxy settlement can change the
perceived balance of risk and reward.
(08:03):
Now I'm going to be watching forsigns that large index funds
break from proxy advisor guidance because these decisions
often tip outcomes and the long term impact will flow from
execution against autonomy and robotics claims that underpin
the package. If Tesla delivers commercial
autonomy products with defensible margins, then the
(08:24):
equity issuance that funds control could look cheap.
If timeline slips though, then shareholder patients for
concentrated control can thin quickly.
Now here, let's I'm just going to break it down for you real
quick. Short version, Tesla's board is
asking investors to approve a multi year equity plan that
could pay Musk up to nearly $1 trillion, with voting set to end
(08:47):
November 5th. In meeting results due on the
6th, proxy firms and several investors urge a no vote, while
the board warns that Musk could walk away if it fails.
Hey, thank you so much for listening today.
I really do appreciate your support.
If you could take a second and hit this subscribe or the follow
(09:08):
button on whatever podcast platform that you're listening
on right now, I greatly appreciate it.
It helps out the show tremendously and you'll never
miss an episode. And each episode is about 10
minutes or less to get you caught up quickly.
And please, if you want to support the show even more, go
to patreon.com/stagezero and please take care of yourselves
(09:30):
and each other and I'll see you tomorrow.
Hey everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss.
The Critical. Crossroads.
That shape SpaceX. Tesla X, The Boring Company and
Neurolink. I'm your host, Will Walden.
Late Monday, Tesla board chair warned shareholders that Elon
Musk could walk away from the company if they reject a new
(00:24):
compensation plan worth up to nearly $1 trillion.
The letter set the stakes for a high pressure vote that closes
on November 5th and leads into Tesla's annual meeting on
November 6th. In this episode, I'll unpack
what the board asked for, why itchose this moment, and how the
(00:44):
payout structure frames Tesla's next decade.
Now, what question sits at the center of this fight?
The board's message leaned on a simple claim that Musk needs
stronger incentives and influence to drive Tesla's push
into autonomy and robotics. I'll explain how the proposal
ties his reward to hard performance targets.
(01:05):
Over about. 7 1/2 years and while outside advisors see the
math still creates heavy dilution for current holders.
Now I'm your guide for this breakdown because I cover these
votes, these governance fights in these capital structures in
plain English every single day. Now, in this episode, I'll also
addressed what history from lastyear's pay saga tells us about
(01:27):
how this might end up. Now we're talking about a board
backed push to approve a record scale CEO compensation plan.
And the plant arrives days afterMusk told investors he will not
pour himself into building a humanoid robot in an autonomy
stack without what he views as adequate control.
(01:50):
And the calendar now compresses every argument into the next 10
days of voting. Tesla Chair Robin Denholm told
investors that failing to pass the package creates a real risk
that Musk reduces his time at Tesla.
She framed the vote as a fundamental choice about whether
investors want to keep Musk in the CEO role and motivate him to
(02:13):
scale autonomy and the Optimist program.
That framing set a clean binary for a dispersed shareholder base
and now includes many index funds in retail voters.
And the proposed package would reach nearly $1 trillion only if
Tesla clears a ladder of aggressive performance
(02:35):
milestones over roughly 7 1/2 years.
You know the structure mirrors the company's habit of trying
compensation to market cap and operational targets rather than
salary and cash bonuses. That design makes the headline
number huge while making the actual payout contingent on
extraordinary execution. And Musk told investors that he
(02:58):
will not feel comfortable building a large scale robot
program and autonomy platform ifhe lacks strong influence
through equity ownership. And he worries that work he
leads today could be derailed later if his control weakens.
So he wants equity that secures A durable voice.
That rationale connects the pay plan to a specific product road
(03:20):
map rather than a general rewardfor past performance.
Now today, Musk owns about 15% of Tesla, which already gives
him heavy influence but not a firm lock out of control.
The new grant would push controldynamics further toward him if
milestones hit, which can comfort some investors who value
(03:43):
continuity over leadership. And it can alarm others who
price checks and balances. Shareholders therefore must
parse control drift as much as dollar figures.
Now, 2 powerful proxy advisors, ISS and Glass Lewis, urge
shareholders to vote against theplan on size and dilution
(04:06):
concerns. Several state treasurers and
investor groups also urged a no vote to question the board's
oversight of Musk and long term value delivery.
These recommendations matter because many institutions follow
them or use them to justify their own votes.
Last year, a Delaware court voided Musk's roughly $55
billion reward after finding flaws in the process and the
(04:29):
board's independence, even though shareholders had approved
the plan twice. Tesla has appealed to the
Delaware Supreme Court and has moved its incorporation to
Texas, which resets the legal backdrop away from Delaware's
deep case law. Now, legal history hovers over
this new vote and feeds skepticism about governance.
Quality in the board's current letter reprises last year's
(04:52):
central threat that Tesla could lose Musk if investors do not
endorse the compensation structure.
The approach worked in June, when shareholders backed the $55
billion package after a heavy campaign even as litigation
continued. And the board now appears to
rely on the same fear of losing the CEO to carry a much larger
plan over the line. Musk escalated the rhetoric on
(05:14):
the latest earnings call by attacking the proxy advisors
with inflammatory language and paying them as hostile to
Tesla's mission. That posture seeks the frame the
vote as a choice between builders and gatekeepers, which
can energize loyal investors canalso harden resistance among
institutions that value governance norms.
(05:35):
Also, the tactic keeps media attention on the vote during the
short window when balance arrive.
You know the calendar now controls the pacing.
Shareholders can vote through November 5th, and Tesla plans to
share preliminary results at theNovember 6th annual meeting.
That schedule leaves limited time for new disclosures or
sweeteners that could change minds.
(05:56):
And the core financial question asks whether the incremental
value must can unlock an autonomy energy and robotics
exceeds the dilution and governance cost of this grant.
Now I bottled this by comparing the potential market cap pass
that clear the milestones with the ownership shifts that come
with new stock issuance. The answer depends on credible
(06:17):
timelines for FSD revenue optimist commercialization and
energy storage growth. And each line item carries
technical and also regulatory risk.
And the governance question askswhether this board can oversee
the CEO while holding him central to the plan.
The Delaware ruling last year raised doubts about board
(06:38):
independence and process quality, which investors now
must weigh against Tesla's record of equity linked
incentives. And the Texas incorporation move
adds another variable because itchanges the form and doctrine
for future disputes. The strategy question asks how
much of Tesla's valuation already prices in the future
(06:59):
must describes. If the current price already
assumes high margin autonomy andhumanoid robotics to scale, then
the upside that would justify the award narrows.
If the price still leans on EV and energy fundamentals, then
incredible autonomy breakout could deliver enough value to
offset any dilution now. The communication strategy from
(07:20):
the board also carries risk. Repeating last year's threat can
persuade some holders, but it can fatigue others who want
fresh reasoning, clear milestones, and tighter
guardrails. I would advise the board to
publish a granular milestone table, explicit dilution bands
under different price paths, anda sunset clause tied to defied
(07:42):
autonomy adoption thresholds. And the near term market impact
will hinge on 2 signals. First, early vote totals that
leak to large holders can move sentiment into the meeting.
Second, any fresh commentary from the earnings call,
follow-ups or an updated proxy settlement can change the
perceived balance of risk and reward.
(08:03):
Now I'm going to be watching forsigns that large index funds
break from proxy advisor guidance because these decisions
often tip outcomes and the long term impact will flow from
execution against autonomy and robotics claims that underpin
the package. If Tesla delivers commercial
autonomy products with defensible margins, then the
(08:24):
equity issuance that funds control could look cheap.
If timeline slips though, then shareholder patients for
concentrated control can thin quickly.
Now here, let's I'm just going to break it down for you real
quick. Short version, Tesla's board is
asking investors to approve a multi year equity plan that
could pay Musk up to nearly $1 trillion, with voting set to end
(08:47):
November 5th. In meeting results due on the
6th, proxy firms and several investors urge a no vote, while
the board warns that Musk could walk away if it fails.
Hey, thank you so much for listening today.
I really do appreciate your support.
If you could take a second and hit this subscribe or the follow
(09:08):
button on whatever podcast platform that you're listening
on right now, I greatly appreciate it.
It helps out the show tremendously and you'll never
miss an episode. And each episode is about 10
minutes or less to get you caught up quickly.
And please, if you want to support the show even more, go
to patreon.com/stagezero and please take care of yourselves
(09:30):
and each other and I'll see you tomorrow.
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