Musk pushes Tesla investors for unprecedented compensation deal

Tesla’s board warned shareholders that the company risks losing Musk if his $1 trillion compensation package is not approved.

Tesla pressures investors

In a letter to shareholders sent ahead of the annual meeting, the company stated that Musk is a key figure for Tesla’s future development, Business Insider reports.

Board Chair Robyn Denholm emphasized that Musk possesses unique skills essential for unlocking the company’s potential and maintaining its market leadership. She warned that failing to approve the compensation package could lead to Musk stepping down as CEO, which would reduce the company’s value and jeopardize its future.

“The fundamental question for shareholders at this year's Annual Meeting is simple: Do you want to retain Elon as Tesla's CEO and motivate him to drive Tesla to become the leading provider of autonomous solutions and the most valuable company in the world?” the statement read.

Why investors are dissatisfied with Musk

This is not Musk’s first conflict with investors. In 2018, the US Securities and Exchange Commission (SEC) sued him over a Twitter post claiming he was considering taking Tesla private at $420 per share. Regulators determined that Musk did not have the necessary funding, and his post caused market manipulation. As a result, he temporarily stepped down as board chair for three years.

Today, Tesla is facing a challenging period. In 2024, the company was overtaken by China’s BYD in electric vehicle production, delivering 1.77 million units compared to BYD’s 1.78 million. Tesla’s market capitalization fell from $1.4 trillion at the end of 2024 to $895 billion in March 2025.

Sales are declining, especially in Europe

Tesla’s sales dropped to 1.79 million vehicles compared to 1.81 million in 2023. The steepest decline occurred in Europe: in January–February 2025, sales fell by 1.5 times, while the overall electric vehicle market grew by more than 25%. In Germany, Tesla’s key market, sales plummeted by 76%.

Analysts note that the decline is driven not only by competition but also by Musk’s political activity, as he openly supports far-right movements.

Musk’s wealth and “appetites”

According to Forbes, Elon Musk became the first person in history with a net worth exceeding $500 billion, thanks to the rise in Tesla’s stock and his other companies.

Regarding the $1 trillion compensation package, Musk would only receive it upon achieving specific goals:

• 20 million vehicles sold by 2035
• 1 million robotaxis and “bots"
• 10 million FSD subscriptions

In addition, Musk must approve a CEO succession plan, committing him to the company for at least 7.5 years.