The California Public Employees Retirement System (CalPERS) is reportedly planning to vote against Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk's $1 trillion compensation award, opposed by proxy advisory firms.
Pay Packet Would Consolidate Power In A Single Shareholder
According to a report by Bloomberg on Wednesday, the fund believes that the package would "concentrate power in a single shareholder," a spokesperson for the fund cited in the report said. The fund also said that the package recommended by Tesla "is larger than pay packages" for other CEOs "by many orders of magnitude."
CalPERS reportedly owns about 5 million Tesla shares, which would add to an approximate investment of $2.3 billion in the EV giant's shares. TSLA currently trades for $459 during after-hours trading, according to Benzinga Pro data.
The fund was also against the previous $56 billion pay package, the report suggests. A court in Delaware struck down the package last year, but Tesla recently appealed the decision.
Elon Musk Receives Support From Florida Fund, Industry Experts
The opposition comes as Florida Retirement System's (FRS) State Board of Administration (SBA), an agency holding over $1 billion in Tesla stock, reiterated its support for Musk's pay packet. The agency called the award a "bold, performance-driven incentive structure” with no guarantees of compensation for Musk.
Meanwhile, Musk's pay package also received support from TV host Jim Cramer, who said that the CEO deserved the compensation award that he wants because "he is actually worth it." Cramer had also expressed support for the award in a social media post earlier.
Cathie Wood, CEO of ARK Invest, also expressed support for the pay package. The investor said that the pay package would win decisively at the November 6 shareholder meeting. She also criticized the proxy advisory firm's opposition to the pay package.
However, Musk’s pay package was also criticized by experts, including investment firm Gerber Kawasaki‘s co-founder Ross Gerber, who called the award “insanity” and questioned the automaker’s Board of Directors and its independence from Musk’s influence.
Elon Musk Calls Proxy Advisors "Corporate Terrorists"
Meanwhile, Musk, during Tesla's third-quarter earnings call, criticized proxy advisory firms International Shareholder Services (ISS) and Glass Lewis, calling the firms "corporate terrorists." He also slammed the advisors, saying that they recommended votes on "random political lines."
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