Tesla Shareholders Demand Nasdaq Probe Into $29 Billion Musk Equity Grant

A group of Tesla shareholders, represented by the SOC Investment Group, has formally requested that Nasdaq investigate Tesla’s recent $29 billion equity grant to CEO Elon Musk, citing concerns about compliance with executive compensation rules and shareholder transparency [1]. In a letter dated August 19, 2025, addressed to Erik Wittman, deputy general counsel and head of enforcement at Nasdaq, the group expressed “serious concerns” over the manner in which Tesla’s board approved the new compensation package under the 2019 Equity Incentive Plan [1].

The SOC group argues that Tesla’s board circumvented Nasdaq listing rules by awarding Musk the “2025 CEO Interim Award” without obtaining shareholder approval [1]. The group contends that the 2019 Plan was never intended to cover compensation for Musk, as disclosed in Tesla’s proxy materials at the time. When shareholders voted on the 2019 Plan in 2018, company disclosures explicitly excluded Musk from eligibility, stating that his compensation would be tied exclusively to the previously awarded—but later overturned—$56 billion options package [1].

SOC further highlighted that major proxy advisory firms had also indicated that the 2018 award was intended to be the sole means of compensation for Musk [1]. The group claims that the 2025 award effectively expands the scope of the 2019 Plan in a material way, and that such a change should have required a new shareholder vote, as stipulated under Nasdaq rules [1].

The $29 billion award will vest in early August 2027, provided that Musk remains in a key leadership role for the full vesting period. However, the grant lacks hard performance metrics, a feature that has drawn criticism from experts [1]. Brian Dunn, director of the Institute for Compensation Studies at Cornell University, noted that such awards are sometimes referred to as “fog-the-mirror grants,” implying that as long as the recipient is still “around,” the shares vest [1].

SOC’s letter also warns that Tesla’s board has indicated the possibility of issuing additional interim awards during the ongoing Delaware litigation over the 2018 package, potentially continuing to bypass shareholder input [1]. The group is urging Nasdaq to take action to “restore the rightful balance between shareholder and management interests,” prevent further dilution, and ensure greater transparency in executive compensation [1].

SOC Investment Group, a coalition of pension funds backed by unions representing over two million members, has long been an active voice in Tesla governance. The group has previously opposed large pay packages for Musk and called for investigations into Tesla’s governance practices, including its board composition and labor policies [1]. They have also co-filed shareholder resolutions advocating for stronger labor rights at the company [1].

Tesla has not publicly responded to the letter or to Fortune’s request for comment [1].

Source: [1] Tesla shareholder group urges probe, ‘appropriate remedial action’ from Nasdaq over Elon Musk’s $29 billion pay package (https://fortune.com/2025/08/20/tesla-shareholder-nasdaq-probe-compensation-29-billion-pay-package/)