Calpers to Oppose Elon Musk's $1 Trillion Tesla Compensation Package Amid Corporate Governance Concerns

Elon Musk's previous compensation packages have faced significant scrutiny from investors and regulators.

The California Public Employees' Retirement System (Calpers), America's largest public pension plan, has announced its intention to vote against Elon Musk's proposed $1 trillion compensation package at Tesla Inc., creating a significant obstacle for what would be one of corporate America's most substantial executive pay arrangements.

According to a Calpers spokesperson's emailed statement, "Tesla's proposed CEO pay package dramatically exceeds compensation at comparable companies by many orders of magnitude. Additionally, it would further concentrate authority in a single shareholder."

Calpers holds approximately 5 million Tesla shares based on Bloomberg-compiled data.

Musk has been actively advocating for the compensation plan ahead of a crucial shareholder vote scheduled for November 6 at Tesla's annual meeting in Austin. During this month's earnings call, the world's wealthiest individual urged investors to support the plan while criticizing shareholder advisory organizations that have opposed it.

The proposed $1 trillion compensation arrangement spans a decade and requires Musk to achieve specific performance targets to receive the full compensation. The agreement could also provide Musk with additional shares, potentially allowing him to control at least 25% ownership of the electric vehicle manufacturer.

Musk's previous compensation arrangements have also faced opposition. Last year, Calpers CEO Marcie Frost expressed the pension fund's opposition to a proposed $56 billion compensation package for Musk. The fund had similarly opposed a 2018 agreement valued at over $50 billion, which was ultimately invalidated by a Delaware court—though Tesla is currently appealing that decision.