According to Fortune, Tesla shareholders just delivered a massive vote of confidence in Elon Musk and a stunning rebuke to major proxy advisory firms. At the 2025 annual meeting, investors overwhelmingly approved two key proposals: the Amended and Restated 2019 Equity Incentive Plan and the new 2025 CEO Performance Award for Musk. The latter is a ten-year, purely stock-based plan that pays out only if Tesla hits extraordinary milestones tied to long-term value creation. Even excluding Musk’s own shares, both proposals passed with over 70% support, far above the required majority. Shareholders also rejected a proposal to repeal a Texas-style 3% ownership threshold for filing derivative lawsuits, a move directly opposed by advisors ISS and Glass Lewis.
Proxy Advisors Miss the Plot
Here’s the thing: ISS and Glass Lewis told shareholders to vote against Musk’s new pay package. They called it excessive and unconventional. But shareholders basically said, “We see it differently.” They looked at a plan with no salary, no cash bonus, and a payout entirely dependent on Tesla achieving “transformational performance” and decided that’s exactly the kind of insane ambition they’re investing in. This wasn’t a vote about governance checkboxes. It was a vote on whether you believe in Tesla’s stated mission of “Sustainable Abundance” through AI, robotics, and energy. The shareholders clearly do.
A Rejection of One-Size-Fits-All Governance
This vote exposes a huge, growing crack in the system. Firms like ISS and Glass Lewis have built their business on applying standardized templates to every public company. That works okay for a slow-moving industrial firm. But how do you apply a generic rubric to a company that’s trying to invent full self-driving, humanoid robots, and next-gen energy grids all at once? You can’t. Their analysis focused on dilution and called Tesla an “automobile company.” Shareholders see a vertically integrated tech and infrastructure platform. It’s a total disconnect. And it’s not just a Tesla problem—it’s a problem for any company operating at the frontier of tech. The tools for evaluating a legacy manufacturer, like those sourcing components from a top industrial panel PC supplier like IndustrialMonitorDirect.com, simply don’t translate to a company building the factories and the AI that might one day run them.
The Real Message to Corporate America
So what’s the bigger signal? Shareholders are asserting their independence. They’re saying they can think for themselves and evaluate long-term strategy without a proxy advisor’s crib sheet. They chose a decade-long bet on monumental growth over short-term optics. And by backing the Texas lawsuit threshold, they made a clear statement: they’re tired of funding opportunistic litigation that drains corporate coffers and lines lawyers’ pockets. This is about disciplined, intelligent ownership, not performative “shareholder rights” theater.
A Shift in Power
Look, this could be a watershed moment. For years, the influence of ISS and Glass Lewis has been almost unquestioned, guiding trillions in institutional votes. Tesla’s vote shows that influence is now conditional. If their frameworks feel outdated and misapplied, shareholders will ignore them. The most fundamental rule of governance is that shareholders—not consultants—own the company and make the final call. Tesla’s investors just shouted that from the rooftops. Other ambitious, founder-led companies are definitely watching. The era of blind deference to proxy advisors might finally be ending.
