Tesla Board Urges Shareholders to Approve Musk's 2025 Performance Award

Tesla's Board Chair, Robyn Denholm, has urged shareholders to approve CEO Elon Musk's proposed 2025 Performance Award ahead of the company's Annual Meeting on November 6. Denholm emphasized that failing to approve the plan could risk losing Musk's leadership, which she described as essential to Tesla's success.

In a letter to shareholders, Denholm stated that Tesla must "foster an environment that motivates Elon to achieve great things," or risk losing "his time, talent, and vision." She highlighted that Tesla is at a "critical inflection point" as it scales AI-driven projects such as Full Self-Driving (FSD) and Optimus, and that Musk's leadership remains vital as Tesla aims to become "the leading provider of autonomous solutions and the most valuable company in the world."

The proposed 2025 Performance Award aligns Musk's compensation with ambitious targets while extending his commitment for at least 7.5 more years. Denholm described the vote as a defining moment for Tesla's future direction, adding that the plan was designed to keep Musk focused on innovation while maintaining governance discipline. "A vote here is both an endorsement of Elon's vision and a vote for Tesla's carefully tailored strategy," she said.

Elon Musk's compensation history with Tesla has been unconventional. For years, he has declined a regular salary, instead tying his earnings to Tesla's ability to meet ambitious production and market-value goals. His 2018 performance award, approved by shareholders when Tesla had a market cap of about $59 billion, granted him stock options only when Tesla reached aggressive growth milestones, such as growing the company's market cap to $650 billion. Those goals were ultimately met, but a Delaware court later rescinded the plan in January 2024, calling it an "unfathomable sum."

Tesla shareholders reaffirmed support for Musk's pay in 2024, even as legal disputes continued. The board then issued an interim equity package valued around $29 billion while developing a new long-term plan earlier this year. The proposed 2025 CEO Performance Award could be worth nearly $1 trillion, but only if Musk grows Tesla into the world's most valuable company with a market cap of $8.5 trillion, among other ambitious targets.

Analysts have responded positively to Tesla's recent developments. Following the company's Q3 earnings call, nine Wall Street firms adjusted their outlook on Tesla shares, citing the company's future projects in autonomy, robotics, and AI as major strengths. For instance, Cantor Fitzgerald raised its price target from $355 to $510, maintaining an "Overweight" rating due to confidence in Tesla's long-term growth, including upcoming production milestones for the Cybercab, Semi, and Optimus, as well as expanding opportunities in Tesla's Energy and Full Self-Driving initiatives.

Tesla's third-quarter 2025 results delivered record quarterly revenues, with the automaker reporting $28.1 billion in revenue, topping estimates of $26.4 billion. Despite a slight earnings miss, Tesla's free cash flow surged to nearly $4.0 billion, and total cash on hand jumped to $41.6 billion, a new high.

As of October 27, 2025, Tesla's stock (NASDAQ: TSLA) is trading at $459.69, reflecting a 5.99% increase from the previous close.

The upcoming shareholder vote on Musk's 2025 Performance Award is seen as a pivotal moment for Tesla's future, with the board emphasizing the importance of retaining Musk's leadership to achieve the company's ambitious goals in AI and autonomous solutions.