TLDR
- Florida’s State Board of Administration became the first major shareholder to support Elon Musk’s proposed $1 trillion compensation plan for 2025, submitting its vote to the SEC on Monday
- The pay package offers up to 423.7 million shares tied to market cap targets ranging from $2 trillion to $8.5 trillion, with milestones for vehicle sales, Full Self-Driving users, and robotaxi deployments
- Tesla Board Chair Robyn Denholm stated the company has internal CEO candidates ready if Musk leaves, with global production chief Tom Zhu among potential successors
- Proxy advisory firms ISS and Glass Lewis have recommended shareholders vote against the proposal, while retail investors make up about 30% of Tesla’s investor base
- Tesla’s annual shareholder meeting is scheduled for November 6, 2025, when the compensation package will be put to a vote
Tesla faces a critical shareholder vote on November 6 that could determine whether CEO Elon Musk receives a $1 trillion compensation package and stays with the company. The vote comes as Tesla’s board warns that Musk may step down or reduce his involvement if the pay plan fails.
The State Board of Administration of Florida made headlines Monday by becoming the first major shareholder to publicly back Musk’s proposed compensation. The SBA filed its support with the SEC, citing the same reasons it supported Musk’s 2018 performance award. The Florida pension fund outlined nine reasons for its endorsement, including that the pay is fully tied to performance and aligns with shareholder interests.
The compensation plan would grant Musk up to 423.7 million shares in 12 parts. The structure ties payments to ambitious market cap targets ranging from $2 trillion to $8.5 trillion. Full payout would dilute existing shares by about 12 percent.
Beyond market value, the plan includes operational milestones. These cover vehicle sales targets, Full Self-Driving user adoption, and Optimus robot and robotaxi deployments. All shares have different vesting periods spanning a 10-year performance window with no early vesting allowed.
Tesla Board Chair Robyn Denholm spoke publicly about succession planning in interviews Tuesday. She confirmed the company would likely name an internal CEO if Musk leaves. Denholm specifically mentioned Tom Zhu, Tesla’s global production chief and China head, as one potential candidate.
Succession Planning Takes Shape
The board chair emphasized that Tesla has developed executives across multiple capacities. She said the company could even consider having more than one person run Tesla. Denholm stated she has discussed the pay package directly with Musk and believes there is a high probability he would back away or become less engaged without it.
The compensation vote faces opposition from influential proxy advisory firms. Both Institutional Shareholder Services and Glass Lewis recommended shareholders vote against the proposal. These firms influence many passive investors who follow their guidance, creating uncertainty about the vote’s outcome.
Retail shareholders represent about 30 percent of Tesla’s investor base. This large retail contingent prompted Tesla to run an unusual get-out-the-vote campaign. On Monday, the company placed its Optimus humanoid robot outside the Nasdaq stock exchange in New York to drum up support.
Major Shareholders Remain Undecided
Tesla board members have been meeting with the company’s largest institutional shareholders. These include Vanguard Group, BlackRock, and State Street. Denholm said investors often wait until the last minute to vote, so the company cannot take anything for granted.
Musk has publicly stated he wants a 25 percent stake in Tesla. He has threatened to shift his attention to xAI, SpaceX, and other ventures if he doesn’t receive his preferred pay package and voting control. The board designed this compensation plan to ensure AI development and new products happen within Tesla rather than at Musk’s other companies.
Tesla stock rose 2.9 percent on Tuesday following news of Florida’s support for the pay package. The stock has gained 12 percent year-to-date through Monday, trailing the S&P 500’s 17 percent gain. This represents a turnaround from earlier in 2025 when the stock tumbled due to concerns about Tesla’s vehicle lineup and consumer backlash to Musk’s political activities.
Wall Street analysts remain divided on Tesla’s prospects. The stock has a Hold consensus rating based on 14 Buy, 11 Hold, and 10 Sell ratings. The average price target of $378.20 suggests a 16.4 percent downside from current levels.
Shareholders will also vote on a nonbinding proposal about investing in xAI. Denholm said Tesla has not invested in the AI startup because it develops different technology than Tesla’s real-world applications, but a shareholder vote in favor would trigger a process to evaluate the transaction.
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