The Tesla shareholders group requests probe, “ appropriate corrective action ” of the Nasdaq on the remuneration plan of $ 29 billion of Elon Musk

The SOC group, formerly known as CTW Investment Group, works with pension funds sponsored by a unions coalition representing more than 2 million members; Many of these funds are Tesla investors.

In a letter dated August 19, 2025, addressed to Erik Wittman, lawyer general assistant and responsible for the application of the law in Nasdaq, SOC expressed “serious concerns” concerning the new Musk’s remuneration package. More specifically, SOC said it feared that Tesla’s board of directors has circumvented the registration rules to the NASDAQ when awarding an “temporary price of the CEO 2025”, revealed earlier this month. The group claims that this equity price should have required a vote by shareholders, as stipulated according to the rules of the NASDAQ, since it has changed considerably modified remuneration plans.

Tesla’s board of directors approved Musk’s new equity package as part of the company’s incentive in 2019, largely in compensation for its $ 56 billion $ 56 billion option package, known as the “CEO performance Award 2018”. This older price was (twice) canceled by Delaware Chancery Court due to questions concerning the independence of the Council, a decision being put into service of the Supreme Court of Delaware.

FortuneShawn Tully has reported that the new package will only apply if Musk and Tesla lose on appeal to Delaware. He also noted that unlike the $ 56 billion scholarship, the more recent award of 29 billion dollars includes restrictions that protect shareholders: actions are acquired on the second anniversary of the subsidy, or early August 2027, only if Musk is used for the whole period as CEO or Development Operations. Musk cannot sell any of these actions acquired only five years later, or on August 3, 2030.

FortuneAmanda Gerut reported that, despite these restrictions, the package lacks difficult performance targets for Musk. Brian Dunn, director of the Institute of Remuneration Studies at Cornell University, said Fortune That experts sometimes call them “fog subsidies. In other words: “If you are there and you have enough breath in you to blur the mirror, you get them.”

The objections were put pressure by Soc Investment Group in his letter has nothing to do with one or the other characteristic of subsidies. The group argues that the board of directors of Tesla dodged the approval of shareholders for the package, in violation of the Nasdaq registration policy.

Tejal Patel, Executive Director of Soc Investment Group, said Fortune In an interview that the “real problem is the fact that the original plan … was quite clear in the disclosure that society did not intend to include Elon Musk in this plan.” Recognizing that such problems are generally raised with the Securities and Exchange Commission, she added: “Admittedly, this is the first time that I report something like that to Nasdaq (and it is) because it was a very specific registration standard.” His understanding of the Nasdaq standard is that “this is exactly what it was designed to avoid”.

The shareholders probably “did not believe” that they voted to approve a new musk package

The SOC Investment Group stresses that when Tesla shareholders approved the 2019 stock incentive plan, the company’s disclosure explicitly excluded eligibility musk, declaring that its remuneration would be exclusively linked to the extraordinary 2018 sentence. “When shareholders voted in 2019, it is likely that, on the basis of disclosure and Not that they voted on a equity plan which would cover the remuneration of Mr. Musk “, notes the letter of the SOC,” precisely because of the “really extraordinary” nature of the price of the performance of the CEO 2018 “. “”

The letter SOC also notes that the 2019 Tesla proxy declaration repeatedly repeated that the 2019 plan was not intended to cover prices for Musk. In addition, the letter mentions that the main proxy advisory companies said that the 2018 CEO’s performance price was “intended to be the only means of remuneration for Mr. Musk, based on society’s disclosure”.

Consequently, SOC writes, the temporary price of the CEO 2025 “seems to extend the class of the participants within the framework of the 2019 plan which would be important to require a distinct shareholder vote.”

The letter also warns that the board of directors of Tesla said that other provisional prices could follow, potentially bypassing shareholders while the case of Delaware, the so-called Torment litigation, is pending. The SOC letter urges the Nasdaq to act to “restore” the legitimate balance between the interests of shareholders and management “,” prevent dilution and guarantee the transparency of the remuneration of managers.

SOC has “real concerns about the director’s independence,” said Patel Fortune. “It is sort of the result of having a board of directors which is not independent.” She said that her group was concerned about questions about a lack of independence from the director and the Juggling Elon Musk responsibilities, and the questions have “reached a head in recent months”. This calendar rides the brief commitment of Musk as a special adviser from the White House, including in -depth involvement with the Ministry of Government, or DOGE. The new remuneration plan, if necessary, “was an opportunity for the board of directors to make Musk focus on Tesla, and instead,” they arrived at this package, she said. She also noted that the conditions under which Musk would receive the same salary, even if he was the head of development or product operations, is “quite unknown”.

A vocal and active shareholder

SOC Investment Group has a long and active commitment history with Tesla, focusing on issues such as the remuneration of managers, governance, independence of the board of directors and labor rights. The group has repeatedly opposed major compensation packages for Musk, including the main campaigns to encourage shareholders to vote against the award of $ 56 billion Musk options and ask for votes against related rewards, in particular when it thought that the appropriate procedures for the approval of shareholders were bypass or that the governance standards were not respected.

The group also urged the shareholders in Tesla to vote against the re -election of certain administrators, such as Kimbal Musk and James Murdoch, citing concerns concerning the lack of independence of the board of directors of Elon Musk and the alignment of the interests of shareholders. Similar to her current letter to the Nasdaq, she asked for investigations by regulators on Tesla’s governance practices, arguing that the company’s board of directors promotes the interests of Musk on those of public shareholders. For example, the group asked the dry to probe the Tesla’s plan to reduce its board of directors in 2022.

The group has also teamed up with other investors in resolutions of co-depotment shareholders calling Tesla to adopt complete labor rights, including non-interference with the organization of workers and compliance with global labor standards. SOC has been involved in webinaries and resolutions highlighting the risks linked to Tesla’s approach to unions and labor problems in several countries.

Tesla did not respond publicly to the letter and did not immediately respond to FortuneComment request.

For this story, Fortune Used a generative AI to help an initial project. An editor checked the accuracy of the information before the publication.