Elon Musk Slams Proxy Advisors as ‘Corporate Terrorists’ Over $1 Trillion Compensation Dispute

Musk’s Explosive Earnings Call Comments

Elon Musk used the final minutes of Tesla’s Wednesday earnings call to deliver a scathing critique of proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, reportedly calling them “corporate terrorists” for their opposition to his $1 trillion compensation package. According to sources familiar with the call, Musk expressed concerns about his future leadership role at Tesla given the influence these firms wield.

“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 stated during the earnings call, according to reports. “I mean, those guys are corporate terrorists.”

Broader Criticism of Proxy Advisory System

In a separate post on social media platform X, Musk expanded his criticism of the proxy advisory system generally, echoing concerns previously raised by ARK Invest CEO Cathie Wood. Sources indicate Musk believes these firms, which provide voting recommendations to shareholders, exercise disproportionate influence—particularly over passive investors like index funds that control substantial voting power through client shares., according to technological advances

“ISS and Glass Lewis have no actual ownership themselves and often vote along random political lines unrelated to shareholder interests!” Musk wrote on X, according to the platform’s records. “This is a major problem that is not just limited to Tesla.”

Advisory Firms Defend Their Role

Industry analysts note that proxy advisory firms don’t directly vote in shareholder meetings but instead provide research and recommendations that institutional investors may consider alongside their own analysis. A spokesperson for Glass Lewis told Fortune that their firm’s role is strictly advisory, stating: “Those that are Tesla shareholders will ultimately make their own decisions about Mr. Musk’s pay proposal and the Board directors that put it forward for shareholder vote.”

According to reports, both ISS and Glass Lewis have twice recommended rejection of Musk’s compensation packages—first in 2018 and again for the current proposal—though shareholders ultimately approved the previous package both times.

The Stakes of the Compensation Package

The compensation package under discussion would reportedly grant Musk approximately $1 trillion over 10 years if he meets specific performance metrics, including increasing Tesla’s market capitalization more than 500% to $8.5 trillion. Musk, who has a net worth estimated at $455 billion, has stated he needs an ownership stake “in the mid-20s approximately” to achieve his ambitious goals for the company.

Analysts suggest the advisory firms’ opposition stems from concerns about the package’s unprecedented scale and potential dilution of existing shareholders’ holdings. According to Glass Lewis’s analysis, Musk’s 2025 performance award is approximately 33.5 times larger than his 2018 package and “unprecedented” compared to compensation at other public companies.

Broader Implications for Corporate Governance

The confrontation highlights ongoing tensions between corporate leadership and proxy advisory firms in corporate governance matters. While Tesla has argued that standard benchmarking doesn’t apply to Musk’s compensation because no other company has “remotely similar goals,” the advisory firms maintain their analysis reflects shareholder protection principles.

Industry observers suggest this dispute may have implications beyond Tesla, potentially influencing how compensation committees structure executive pay packages at other technology companies with visionary leadership. The shareholder vote on Musk’s compensation package is expected to be closely watched as an indicator of investor sentiment toward mega-compensation plans.

References

• http://en.wikipedia.org/wiki/Tesla,_Inc.
• http://en.wikipedia.org/wiki/International_Space_Station
• http://en.wikipedia.org/wiki/Elon_Musk
• http://en.wikipedia.org/wiki/Shareholder
• http://en.wikipedia.org/wiki/Glass_Lewis

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