Tesla Gains Massive Vote of Confidence on Compensation Plan for Elon Musk

The State Board of Administration of Florida (SBA) has given a significant endorsement to Tesla's proposed $1 trillion compensation plan for CEO Elon Musk. This development was disclosed in a filing submitted to the Securities and Exchange Commission (SEC) on Monday.

The SBA has expressed its intent to support Musk's compensation proposal, in line with its past support for the 2018 performance award and last year's subsequent vote.

"The SBA backed Tesla’s 2018 performance award proposal and reaffirmed this support during the 2024 Tesla shareholder vote. The stock's total return following the 2018 award and the success of previous incentive-driven plans strongly justify our backing of the proposed 2025 CEO performance award. We trust that this plan continues to strategically align management and shareholder interests, encouraging long-term shareholder value creation focused on financial factors."

This marks the first major shareholder endorsement of Musk's prospective compensation plan, which was introduced by Tesla and its Board of Directors earlier this month.

Contrary to the SBA's approval, Institutional Shareholder Services (ISS) and Glass Lewis, two influential proxy advisory firms, have voiced opposition to the compensation package.

Responding during the Q3 Earnings Call last week, Musk criticized these firms, labeling them “corporate terrorists.”

"I find it unsettling to develop a corporation here and risk being displaced by absurd recommendations from ISS and Glass Lewis who seem clueless. They act like corporate terrorists. The main issue is many index and passive funds follow whatever Glass Lewis and ISS suggest. Historically, they've given poor advice. Following such recommendations could have devastating impacts on the company's future."

The SBA's endorsement is grounded in Musk's track record over the past decade, which includes significant growth and shareholder value enhancement, alongside meeting ambitious company goals.

Furthermore, the SBA outlined nine supporting reasons for Musk’s compensation:

1. Performance-based pay design – Entirely aligned with shareholders
2. Award size and share count – Performance-linked allocation, value-based dilution, milestone-structured
3. Market capitalization milestones – Defined, tiered targets, emphasis on sustained performance and shareholder value
4. Operational/Product milestones – Defined, measurable goals, strategic focus, financial discipline, multiple evaluation windows
5. Vesting/holding periods – Long-term structure, mandatory retention, ongoing service requirement
6. CEO succession – Succession planning, safeguarding performance integrity
7. Time horizon and duration – 10-year performance window, no intermediate vesting
8. Dilution & voting power implications – Potential for increased ownership, permanent dilution
9. Ambition and stretch goals – Exceptional growth scale, shareholder value focus

Shareholder voting on Musk’s compensation package is scheduled for November 6 during the annual Shareholder Meeting.