(Reuters) -Proxy advisory firm Institutional Shareholder Services on Friday urged Tesla shareholders to vote against CEO Elon Musk's proposed $1 trillion performance award, citing concerns over excessive compensation and governance risks.
The ISS recommendation adds pressure on Tesla's board ahead of a closely watched November 6 shareholder meeting and renews scrutiny of Musk's compensation after a Delaware court earlier voided his $56 billion pay package.
Last month, Tesla's board proposed a $1 trillion
compensation plan for Musk in what it described as the largest corporate pay package in history, setting ambitious performance targets and aiming to address his push for greater control over the company.
ISS said that while the board's goal is to retain Musk because of his "track record and vision," the 2025 pay package "locks in extraordinarily high pay opportunities over the next ten years" and "reduces the board's ability to meaningfully adjust future pay levels."
The proxy adviser cited the "astronomical" size of the proposed grant, design features that could deliver very high payouts for partial goal achievement, and potential dilution for existing investors.
Tesla did not immediately respond to a request for comment.
ISS valued the stock-based award at $104 billion, higher than Tesla's own estimate of $87.8 billion.
The grant would vest only if Tesla reaches market capitalization milestones up to $8.5 trillion and operational targets including delivery of 20 million vehicles, one million robotaxis and $400 billion in adjusted core earnings.
(Reporting by Akash Sriram in Bengaluru; Editing by Alan Barona)
