Elon Musk defends $1 trillion Tesla pay deal, calls proxy firms corporate terrorists

Elon Musk, the world’s richest person, used the closing minutes of Tesla Inc.’s quarterly earnings call to launch a fiery defence of his proposed $1 trillion pay package, lashing out at proxy advisory firms that have urged shareholders to vote against the plan.

In a characteristically unscripted moment on Wednesday, Musk interrupted his chief financial officer to denounce Institutional Shareholder Services (ISS) and Glass Lewis, describing them as “corporate terrorists” who “have no freaking clue.”

“I just think that there needs to be enough voting control to give a strong influence,” Musk said, interrupting his CFO at the tail end of a 75-minute call.

“But not so much that I can’t be fired if I go insane.”

The remarks came ahead of Tesla’s annual general meeting on November 6 in Austin, where shareholders will decide whether Musk’s stake in Tesla should rise from 13% to nearly 29%, contingent on the company achieving ambitious milestones — including selling 12 million vehicles, producing one million humanoid robots, and deploying one million robotaxis during his leadership.

It is being described as the largest pay package in corporate history.

“I just don’t feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass Lewis, who have no freaking clue,” Musk said, adding that the advisory services did not have shareholders’ interests in mind.

Musk has previously hinted that he might even consider stepping away from Tesla if shareholders reject the proposed compensation plan.

Proxy advisors urge rejection of Musk’s record-breaking package

Both ISS and Glass Lewis have advised Tesla shareholders to reject the “mega performance equity award,” arguing that the sheer size of the proposed compensation and its structure could erode shareholder value.

The “mega performance equity award” to Musk, designed to retain the CEO long-term, “has an astronomical grant value conditioned upon far-reaching performance targets that, if achieved, would create enormous value for shareholders,” ISS wrote on Friday.

It added that while some shareholders may support the pay plan, “there are unmitigated concerns surrounding the special award’s magnitude and design.”

Glass Lewis echoed the sentiment, calling the terms of the plan “a significant cause for concern.”

It also highlighted the potential dilution of shareholder value should the company issue additional shares to fulfil the package.