NZ Super Fund votes against Elon Musk’s US$1 trillion pay package – but it carries easily

“We voted against in line with our customised policy and based on ISS [Institutional Shareholder Services] recommendations for remuneration issues,” the NZ Super Fund spokesman said.

The Super Fund’s policy calls for “alignment of pay and performance, and addressing problematic compensation practices”.

Those who invested in Tesla’s Nasdaq-listed shares last decade banked spectacular gains in the early 2020s. More recently, the law of big numbers has kicked in. Musk’s political forays have added an element of volatility, too.

ISS pitches itself as “the world’s leading provider of corporate governance and responsible investment solutions”.

An ISS analysis last month criticised the rationale for the potential windfall, noting Musk’s financial interests are already closely tied to Tesla’s fate.

Tesla is one of the so-called “Magnificent Seven” US tech stocks. The NZ Super Fund has a substantial holding in each of the seven – the largest of which is its $2.4b stake in Nvidia.

As structured, the separation of the overall package into tranches of “unprecedented” value “could undermine the necessity for all goals to be realised”, said ISS, which also flagged the lack of explicit requirements that Musk keep focused on Tesla.

The new pay package, crafted to ensure Musk’s continued service to Tesla as the company pursues breakthrough technology on artificial intelligence and robotics, was also opposed by several institutional investors, including the California Public Employees’ Retirement System, various New York City retirement systems, and Norges Bank Investment Management, which is the sixth largest institutional shareholder with a 1.2% stake.

As Musk’s role heading cost-cutting agency “DOGE” hit Tesla sales, US President Donald Trump promoted the firm’s vehicles at a White House event. But after the pair had a public fight over the “Big Beautiful Bill”, which increased Government spending and debt (and eliminated EV subsidies) Tesla and Musk’s other major firm, SpaceX, have been the subject of Trump threats and broadsides. Cutting red tape around pilot projects like Tesla’s robotaxis no longer looks so easy. Photo / Getty Images

“I’d like to just give a heartfelt thanks to everyone who supported the shareholder votes,” Musk said at Tesla’s annual meeting. “I super-appreciate it.”

Cheers of “Elon” broke out after the vote result was announced at the gathering, which was held at the company’s factory in Austin, Texas.

After years of unrelenting growth, Tesla suffered its first-ever sales decline last year amid cheaper Chinese competition and Musk’s alliance with Trump alienating some EV buyers. 2025 has seen a fall in profits under tariff pressure. Tesla sources a number of materials and products from China, including the batteries it buys from BYD. Tesla sales continues to decline in the first two quarters of this year, but increased 7% in the third quarter as buyers rushed to beat the expiry of a US$7500 EV tax credit. Chart / Statistica

Musk has emerged as a lightning rod figure, in part because of his embrace of right-wing politicians, including US President Donald Trump. But today’s vote marked the latest demonstration of the entrepreneurial billionaire’s resonance with investors.

The package aims to ensure Musk stays at Tesla for at least seven and a half years. It would lift Musk’s holding in Tesla from about 12% when the package was introduced in September to potentially more than 25%.

Musk has described Tesla’s potential growth as nearly boundless, saying in July it “will be the most valuable company in the world by far” if it delivers on envisioned advances on autonomous driving and AI.

But Musk himself has hinted he could leave Tesla or take a back seat if his ownership share is not raised enough to provide the influence over its future he desires.

In urging shareholders to back the proposal, Tesla chairman Robin Denholm argued keeping Musk was essential to Tesla’s future, warning the company’s stock could dive if he exited.

The board has shrugged off criticism that the billionaire’s embrace of contentious political figures has weighed on sales.

Base of shareholder support

Tesla investors have been reliable Musk supporters in past votes over Musk’s pay packages, including a 2018 deal for about US$55.8 billion that has repeatedly been blocked by a Delaware court in response to shareholder litigation.

After the latest Delaware ruling, Denholm and the rest of Tesla’s board went back to the drawing board, first approving in August an “interim” compensation award worth about US$29b for Musk and then unveiling the larger plan in September.

Once again on Friday, Tesla shareholders signed off on stratospheric pay for Musk and also handed the company victories on other key votes, including the re-election of board members.

But Tesla Takedown, an activist group, blasted the vote result and highlighted the company’s drop in automotive sales in recent quarters.

“Elon Musk just got US$1t for failure,” said the group, which rallied against the plan Wednesday in downtown Austin.

“Sales are down, safety risks are up and his politics are driving customers away. This isn’t leadership – it’s the world’s most expensive participation trophy.”

Elon Musk is already the world’s richest person and has a net worth of more than US$500b, according to Forbes. Photo / Getty Images

On the other side, Wedbush analyst Dan Ives said the sweeping vote in favour of Musk cements his position as “the AI Revolution takes hold giving us greater confidence in the Tesla story moving forward”.

Musk, with a net worth of more than US$500b, is already the world’s richest person, according to Forbes’ real-time list of billionaires.

He must hit 12 milestones related to market capitalisation to receive the full pay package. The first tranche would be available when Tesla reaches US$2t in market value.

The plan also involves a series of operating profit and product goals, such as the delivery of 20 million Tesla vehicles.

With reporting by AFP

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.