Tesla’s Musk CEO award gets mixed proxy advisor recommendations

Investing.com -- Proxy advisory firm Egan-Jones has issued split recommendations on Tesla’s proposed 2025 CEO Performance Award for Elon Musk, ahead of the November 6 shareholder vote.

Under its Wealth-Focused Policy, which prioritizes aligning executive pay with shareholder value creation, Egan-Jones recommends shareholders vote FOR the award. The firm notes that Musk would receive nothing if none of the twelve performance tranches are met, creating strong alignment between his interests and those of shareholders.

However, under its alternative policy frameworks—including Blended, ESG, Catholic, and Taft-Hartley—the advisory firm recommends voting AGAINST the award. These policies give greater weight to governance risks, potential shareholder dilution, board independence, and social equity factors.

The proposed award could dilute existing shareholders by up to 12% if all tranches vest, potentially increasing Musk’s total voting stake to nearly 28.8% when combined with his prior awards. The firm also highlighted that if Musk’s prospective equity stake were distributed among Tesla’s approximately 125,000 employees, each would receive about $8 million worth of stock, raising concerns about human-capital and morale risks.

For the award to fully vest over ten years, Tesla (NASDAQ:TSLA) must achieve several ambitious milestones, including reaching an $8.5 trillion market cap, generating $400 billion in adjusted EBITDA, delivering 20 million vehicles, securing 10 million active Full Self-Driving subscriptions, operating 1 million robotaxis commercially, and delivering 1 million "Bots."

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