The $50 Billion Musk Referendum

The pay package is just one in a series of measures that shareholders have already been asked to vote on by proxy, ahead of Thursday’s meeting. Others include whether Tesla’s incorporation should move from Delaware to Texas, whether the company should soften its hardline stance on labor negotiations, and whether the company should preemptively impose a moratorium on using minerals mined from the seabed.

Yet none have been as divisive as Musk’s pay. Deep rifts among investors have been exposed in the lead-up to the vote. Tesla board chair Robyn Denholm has backed the pay package, as has billionaire investor Ron Baron. “Tesla is better with Elon,” Baron wrote in an open letter last week. “Tesla is Elon.” Yet the deal’s opponents include two influential proxy advisory groups, which guide institutional investors on votes, as well as shareholders from the Nordic countries, where Tesla has clashed with workers over labor rights.

Norway’s trillion-dollar sovereign wealth fund has said it will vote against the pay deal, as will the country’s largest pension fund, KLP. “While we acknowledge that the company has grown significantly and successfully during the performance period, we still note that the total award value remains excessive,” Kiran Aziz, KLP’s head of responsible investments, told WIRED, adding the fund will vote in favor of the motion urging Tesla to engage in labor negotiations. “Recent [dispute] between Tesla and the company’s workers in Sweden as well as Tesla’s history of accusations of interference with workers’ rights is of great concern and shows that the company needs to do better work in the area.”

Behind the scenes of the vote, lobbying has been intense. Tesla has paid for ads on Google and X, which is owned by Musk, telling investors to “protect your investment” and support the proposal, according to a company filing with the Securities and Exchange Commission. In April, Tesla also launched a website urging shareholders to vote against the Delaware court decision and support the pay package. “The Court’s decision, if implemented, means that Elon would not receive any compensation for the tremendous accomplishments that have generated significant stockholder returns in less than six years,” the website reads.

“This is the most advertising I can remember from any proxy solicitation,” says Robert Anderson, a professor at the University of Arkansas School of Law. He believes the Musk effect—the CEO’s ability to attract endless publicity—has contributed to this situation. But the pay package and the proposed Texas move are both unprecedented in the business world, he adds. “Either [of] those things by themselves would be pretty significant, even if he were not a public figure.”

The vote will be decided by a mix of institutional investors as well as an unusually large cohort of retail investors, who control around 44 percent of the business. Among shareholders, there are concerns that if Musk does not win his compensation, “his attention might drift to some of his other ventures a little bit more,” says Anderson. Musk managed to juggle multiple ventures for years, but he has been more publicly distracted since acquiring the social media service Twitter and renaming it X. There, his visible turn to right-wing politics has garnered new fans and left some old ones behind.

Whatever happens this week, Tesla and Musk may emerge looking a bit less superhuman. For years, the two have insisted that Tesla is a tech company, with a Silicon Valley–style startup scrappiness. “We should be thought of as an AI or robotics company,” Musk told investors—or voters—in April. “If you value Tesla as just an auto company … fundamentally, it’s just the wrong framework.”