Within the newest twist in a long-running battle over Elon Musk’s compensation at Tesla, the SOC Funding Group has requested that Nasdaq formally examine “and take applicable remedial motion” in opposition to Tesla for its latest $29 billion fairness grant to the CEO. In a letter to Nasdaq, the group raised considerations about compliance with government compensation guidelines and shareholder transparency.
The SOC Group, previously generally known as the CtW Funding Group, works with pension funds sponsored by a coalition of unions representing over 2 million members; lots of these funds are Tesla traders.
In a letter dated Aug. 19, 2025, addressed to Erik Wittman, deputy common counsel and head of enforcement at Nasdaq, SOC expressed “severe considerations” about Musk’s new compensation bundle. Particularly, SOC stated it was involved that Tesla’s board circumvented Nasdaq itemizing guidelines when awarding Musk a “2025 CEO Interim Award,” disclosed earlier this month. The group claims this fairness award ought to have required a shareholder vote, as stipulated underneath Nasdaq’s guidelines, on condition that it materially amended compensation plans.
Tesla’s board permitted Musk’s new fairness bundle underneath the corporate’s 2019 Fairness Incentive Plan, largely as compensation for his beforehand awarded—and overturned—$56 billion choices bundle from 2018, generally known as the “2018 CEO Efficiency Award.” That older award was (twice) overturned by the Delaware Chancery Court docket owing to questions relating to board independence—a call at the moment being appealed on the Delaware Supreme Court docket.
Fortune’s Shawn Tully reported that the brand new bundle will solely apply if Musk and Tesla lose on enchantment in Delaware. He additionally famous that in contrast to with the $56 billion award, the newer $29 billion award contains restrictions that shield shareholders: The shares vest on the second anniversary of the grant, or early August 2027, provided that Musk serves for all the interval as CEO or chief of product improvement or operations. Musk can’t promote any of these vested shares till 5 years later, or on Aug. 3, 2030.
Fortune’s Amanda Gerut reported that, such restrictions however, the bundle lacks onerous efficiency targets for Musk. Brian Dunn, director of the Institute for Compensation Research at Cornell College, informed Fortune that specialists generally refer to those as “fog-the-mirror grants.” In different phrases: “In the event you’re round and have sufficient breath left in you to fog the mirror, you get them.”
The objections lobbied by SOC Funding Group in its letter don’t have anything to do with both characteristic of the grants. The group argues that the Tesla board dodged shareholder approval for the bundle, in contravention of Nasdaq itemizing coverage.
Tejal Patel, government director of the SOC Funding Group, informed Fortune in an interview that the “actual problem is the truth that the unique plan … was fairly clear within the disclosures that the corporate didn’t intend to incorporate Elon Musk in that plan.” Acknowledging that such points are often raised with the Securities and Change Fee, she added: “Admittedly, that is the primary time I’ve flagged one thing like this to Nasdaq, [and that’s] as a result of it was a really particular itemizing normal.” Her understanding of the Nasdaq normal is that “that is precisely what it was designed to keep away from.”
Shareholders doubtless ‘didn’t consider’ they have been voting to approve a brand new Musk bundle
The SOC Funding Group emphasizes that when Tesla shareholders permitted the 2019 Fairness Incentive Plan, firm disclosures explicitly excluded Musk from eligibility, stating that his compensation could be solely tied to the extraordinary 2018 award. “When shareholders voted on the 2019 Plan it’s doubtless that, based mostly on the accessible disclosures and analysis, they didn’t consider they have been voting on an fairness plan that may cowl compensation to Mr. Musk,” the SOC letter notes, “exactly due to the ‘actually extraordinary’ nature of the 2018 CEO Efficiency Award.”
The SOC letter additionally notes that Tesla’s 2019 proxy assertion repeated a number of instances that the 2019 plan was not meant to cowl awards to Musk. Moreover, the letter mentions that main proxy advisory companies indicated that the 2018 CEO Efficiency Award was “meant to be the only technique of compensation for Mr. Musk, counting on the Firm’s disclosures.”
Subsequently, SOC writes, the 2025 CEO Interim Award “seems to increase the category of individuals underneath the 2019 Plan in method that may be sufficiently materials to require a separate shareholder vote.”
The letter additionally warns that Tesla’s board has indicated additional interim awards may comply with, doubtlessly bypassing shareholder votes whereas the Delaware case, the so-called Tornetta litigation, is pending. The SOC letter urges Nasdaq to behave to “restore ‘the rightful stability between shareholder and administration’s pursuits,’” stop dilution, and guarantee government compensation transparency.
SOC has “actual considerations over director independence,” Patel informed Fortune. “That is form of the end result of getting a board that’s not unbiased.” She stated her group is worried with points over an absence of director independence and the juggling of duties by Elon Musk, and issues have “come to a head within the final a number of months.” This timeline overlaps with Musk’s transient engagement as a particular advisor to the White Home, together with intensive involvement with the Division of Authorities Effectivity, or DOGE. The brand new compensation plan, if something, “was a chance for the board to get Musk to give attention to Tesla, and as a substitute” they’ve arrived at this bundle, she stated. She additionally famous that the circumstances underneath which Musk would obtain the identical pay, even when he was a chief of product improvement or operations, is “fairly unheard-of.”
A vocal, energetic shareholder
SOC Funding Group has a lengthy and energetic historical past of engagement with Tesla, specializing in points corresponding to government compensation, governance, board independence, and labor rights. The group has repeatedly opposed massive pay packages for Musk—together with main campaigns to encourage shareholders to vote in opposition to Musk’s $56 billion possibility award and calling for votes in opposition to associated awards, particularly when it believed correct shareholder approval procedures have been circumvented or governance requirements weren’t met.
The group has additionally urged Tesla shareholders to vote in opposition to the reelection of sure administrators, corresponding to Kimbal Musk and James Murdoch, citing considerations about lack of board independence from Elon Musk and alignment with shareholders’ pursuits. Much like its present letter to Nasdaq, it has requested investigations by regulators into Tesla’s governance practices, arguing that the corporate’s board favors Musk’s pursuits over these of public shareholders. For instance, the group requested the SEC to probe Tesla’s plan to shrink its board in 2022.
The group has additionally joined with different traders in co-filing shareholder resolutions calling for Tesla to undertake complete labor rights insurance policies, together with noninterference with employee organizing and compliance with world labor requirements. SOC has been concerned in webinars and resolutions highlighting dangers associated to Tesla’s method to unions and labor points throughout a number of international locations.
Tesla has not publicly responded to the letter and didn’t instantly reply to Fortune’s request for remark.
For this story, Fortune used generative AI to assist with an preliminary draft. An editor verified the accuracy of the data earlier than publishing.
