Elon Musk’s big squeeze: pay me, or I’m not your CEO

20 October 2025

Elon Musk has given Tesla shareholders a choice: approve his massive new compensation package, or he might not be the one running the company. In a blunt response to criticism over the plan, Musk said: "Which of those [other] CEOs would you like to run Tesla? It won’t be me." This ultimatum comes as investors get ready for a shareholder meeting on November 6, putting them in one of the most difficult positions in the company's history.

At the center of the debate is a complex set of proposals. The main one, Proposal 4, is a new compensation plan that could be worth up to £1 trillion if Musk meets a series of incredibly high stock market and product goals. But there is also a re-vote on his old £40 billion pay package from 2018, which a Delaware court already ruled illegal because the board, which includes Musk's friends and family, misled shareholders. This legal drama is why Musk pushed to move Tesla's incorporation to Texas, where he believes he has more control.

But this isn't just about one plan. Tucked inside the vote is Proposal 3, which asks shareholders to approve two things at once. It would refill the employee stock fund with 60 million shares for Tesla's 120,000 workers. But it also creates a "special share reserve" of 208 million shares, worth about £66 billion, just for Elon Musk. This special fund has no performance goals attached. To give the entire workforce their stock, shareholders must also approve the £66 billion reserve for the CEO.

This is especially controversial because the employee stock fund is empty for one reason: the board already drained it. Without a shareholder vote, the board recently gave Musk a £19 billion "Interim Award" taken directly from that employee reserve. Now, they are holding the employee fund "hostage" to get shareholders to approve even more shares for Musk. In total, the proposals could grant Musk over 630 million new shares, while all other employees combined get only 60 million.

After Musk sold billions of dollars in Tesla stock to buy the social media site X, his ownership in the car company dropped from about 25% to 13%. Musk has publicly stated he "doesn't feel comfortable" with his current ownership level and wants a 25% stake. He has openly threatened that if he doesn't get it, he might develop Tesla's important artificial intelligence and robotics projects at one of his other private companies.

With a 25% stake, Musk would find it much easier to block shareholder proposals that try to create more accountability. This includes current proposals to allow bylaw changes with a simple majority vote. Critics argue that Musk is using threats to force shareholders to give him more power, making him less accountable for the company's actual performance.

The company's core business (until now) of selling electric cars is struggling. Sales are down, profits are dropping, and many analysts blame Musk's distracting behavior and public comments for damaging the Tesla brand. And yet, Tesla's stock price remains incredibly high. Many believe the stock is no longer valued on how many EVs it sells, but on Musk's grand promises of future products like self-driving robotaxis and humanoid robots.

Shareholders are trapped. They fear that if they vote "no" and Musk leaves, the grand promises will leave with him, causing the "meme stock" value to collapse. They feel forced to choose between a CEO who is hurting the car business and a showman who is propping up the stock price. Musk seems to be holding that stock value hostage, essentially telling investors, "Give me my money, or I'll stop propping up your shares."

Even if investors ignore the threat, the pay package itself has major problems. Analysts at Reuters noted that the $1 trillion plan is structured in a way that Musk could still receive $20 billion to $40 billion even if Tesla's stock growth is below average for the S&P 500. He is effectively asking for one of the largest paydays in history, even for potential failure or simple, average performance.

This entire situation is backed by a strange new marketing push. Tesla, the company that famously "hates advertising," is suddenly spending money on TV commercials, Google ads, and social media campaigns. Are these ads trying to sell electric cars? No they don't. They are designed to pressure shareholders to vote "yes" on Musk's pay. The company has even used its official X account to publicly attack the advisory firm ISS and a group of large pension funds after they recommended a "no" vote, a very unusual move for a public company.

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