DEFA14A: Tesla Urges Shareholders to Reject Proxy Advisor Advice

Tesla is actively soliciting shareholder votes for its 2025 Annual Meeting, urging them to disregard proxy advisor recommendations on key proposals, including CEO compensation and director elections.

Summary

• Tesla posted materials on X and its website on October 20-21, 2025, to solicit proxies for its 2025 Annual Meeting.
• Shareholders are urged to 'Take back your vote from proxy advisors' and vote in the interests of Tesla shareholders.
• Tesla criticizes ISS and Glass Lewis for using 'simplistic checklists' and 'standardized benchmarks' that fail to account for Tesla's 'extraordinary growth' and 'unique value creation trajectory'.
• Proxy advisors have repeatedly recommended against compensation proposals since 2018, despite these being incentive-based and driving a 20x improvement in market capitalization from March 2018 to August 2025.
• ISS and Glass Lewis are again recommending against the CEO performance award (Proposal 4) and a proposal to address Elon Musk's previously earned compensation (Proposal 3).
• Tesla highlights its total shareholder return of over 39,000% since IPO (June 29, 2010, to September 30, 2025), significantly outpacing the S&P 500.
• The company argues that proxy advisors lack the infrastructure and capacity for company-specific financial analysis, citing their own statements in legal proceedings.
• Tesla defends its tailored governance model and advocates for the re-election of directors Ira Ehrenpreis, Kathleen Wilson-Thompson, and Joe Gebbia, who are deemed critical to the company's future and value creation.
• Shareholders are urged to vote 'WITH the Board's recommendations on all proposals' by the final deadline of 11:59 pm ET on November 5, 2025, for the Annual Meeting on November 6, 2025.

Sentiment

Score: 9

Explanation: The filing exhibits a highly positive sentiment regarding Tesla's past performance and future potential, aggressively advocating for its strategic direction and management. It strongly criticizes proxy advisors, framing their recommendations as misinformed and detrimental to shareholder interests, thereby positioning Tesla's proposals as essential for continued exceptional value creation.

Positives

• Achieved a total shareholder return of over 39,000% since IPO (June 29, 2010, to September 30, 2025), far outpacing the S&P 500.
• Compensation proposals have been incentive-based and helped drive a 20x improvement in market capitalization from March 2018 to August 2025.
• Proxy advisors acknowledge the CEO performance award (Proposal 4) is conditioned on 'far-reaching performance targets' that, if achieved, would create 'historical value' and 'dwarf even the largest companies in the world'.
• The Board has designed a governance model tailored to Tesla's unique circumstances, focusing on durable, long-term shareholder returns.
• Directors Ira Ehrenpreis and Kathleen Wilson-Thompson are recognized governance leaders, named in the National Association of Corporate Directors' Directorship 100.
• Proposing a binding shareholder vote to eliminate supermajority voting, which will make it easier for shareholders to take additional actions like declassification in the future.

Negatives

• ISS and Glass Lewis recommendations 'don't add up' and 'defy basic common sense,' ignoring Tesla's record and vision.
• Proxy advisors use 'simplistic checklists' and 'standardized benchmarks' that are 'incapable of accounting for the sort of extraordinary growth Tesla has experienced'.
• Their analysis 'cannot distinguish between innovation and risk, or between ambition and mismanagement'.
• ISS and Glass Lewis have repeatedly recommended against compensation proposals since 2018.
• Proxy advisors lack the tools and capacity to make company-specific financial analyses, as admitted in legal proceedings, requiring 'tremendous personnel resources' and 'years to develop compatible systems' for ISS, and 'hundreds of thousands of dollars [annually]' for Glass Lewis.
• Proxy advisors' governance standards are based on 'algorithmic conformity' and 'aggregated public feedback' untethered from company-specific financial performance.
• Glass Lewis recommended against a female director (Kathleen Wilson-Thompson) after deeming the board lacking in gender diversity.
• Glass Lewis disregarded Tesla's disclosed procedure for responding to shareholder feedback on supermajority voting and declassification.
• Proxy advisors have an 'opaque business model' with conflicts of interest, offering consulting services to companies they rate.
• State and federal officials are scrutinizing proxy advisor practices.

Risks

• Risk of shareholders 'robovoting' with proxy advisors, potentially leading to votes against exceptional long-term value creation, exceptional directors, and Tesla's unique business model.
• Proxy advisors' recommendations are not tailored to the needs, criteria, and interests of different investors, potentially leading to misaligned voting decisions.
• The potential for proxy advisors' 'one-size-fits-all' approach to governance to punish directors for deviating from their policies, hindering critical thinking about company-specific best interests.

Future Outlook

Tesla has outlined an ambitious long-term vision for the company and for humanity, with a path to create trillions of dollars in shareholder value. The company aims for transformational growth and to win the AI talent war, continuing its evolution from an EV manufacturer to a provider of autonomous solutions.

Management Comments

• "Take back your vote from proxy advisors: vote in the interests of Tesla shareholders."
• "ISS and Glass Lewis weren’t built to evaluate companies like Tesla. Their model is based on standardized benchmarks—conventional, one-size-fits-all thinking designed for the average company. But Tesla isn’t conventional, and neither is the size of our financial returns."
• "Evaluating Tesla requires breaking the mold and ignoring benchmarks based on ordinary companies. It demands a tailored analysis that reflects our unique value creation trajectory."
• "Our Board has designed a governance model that is tailored to the unique circumstances facing our company."
• "Good governance is not an end in and of itself but rather an ongoing commitment to engage in practices that allow us to generate durable, long-term shareholder returns."
• "Today, Tesla is at a critical inflection point – we have outlined an ambitious long-term vision for our company and for humanity – and a path to create trillions of dollars in shareholder value along the way. But we need your support to make our vision a reality."
• "We urge you to vote WITH the Board’s recommendations on all proposals at our upcoming Annual Meeting on November 6."

Industry Context

The filing highlights a significant divergence between innovative, high-growth companies like Tesla and traditional proxy advisory firms (ISS, Glass Lewis) whose standardized methodologies may not adequately assess unique business models and performance. It also underscores increasing regulatory scrutiny of proxy advisors and their business practices, particularly concerning the disclosure of financial analyses underlying their recommendations. The mention of an 'AI talent war' indicates a broader industry trend of intense competition for specialized skills in emerging technologies.

Comparison to Industry Standards

• Tesla's total shareholder return of over 39,000% since IPO (June 29, 2010, to September 30, 2025) 'far outpacing the S&P 500 and countless other investment alternatives' during the same period.
• The company contrasts its 'unique value creation trajectory' and 'extraordinary growth' with proxy advisors' 'one-size-fits-all' approach and 'standardized benchmarks' designed for 'average companies'.
• The CEO performance award targets, if achieved, 'would dwarf even the largest companies in the world currently' (as cited from Glass Lewis's own report), indicating performance expectations far beyond typical industry benchmarks.
• Tesla's governance model is presented as tailored to its unique circumstances, in direct opposition to proxy advisors' 'algorithmic conformity' and 'standardized governance checklists' which are seen as driving companies to be 'average'.

Corporate Governance

Legal Proceedings

• Institutional Shareholder Services Inc. v. Paxton, No. 1:25-cv-01160 (W.D. Tex. filed July 24, 2025), concerning requirements for proxy advisors to disclose financial analyses underlying their recommendations.
• Glass, Lewis & Co., LLC v. Paxton, No. 1:25-cv-01153 (W.D. Tex. filed July 24, 2025), concerning requirements for proxy advisors to disclose financial analyses underlying their recommendations.

Stakeholder Impact

• **Shareholders**: Directly impacted by voting decisions on director elections, CEO compensation, and equity incentive plans, which Tesla argues are critical for long-term value creation. The filing urges shareholders to protect their financial interests by voting with the Board.
• **Management/Board**: The filing defends the current board's governance and seeks approval for CEO compensation, directly impacting management incentives and board composition.
• **Employees**: The A&R 2019 Equity Incentive Plan (Proposal 3) could impact employee incentives, though the filing primarily focuses on CEO compensation. The mention of an 'AI talent war' implies a focus on attracting and retaining key talent.

Next Steps

• Shareholders are urged to read the Definitive Proxy Statement and any other relevant documents filed with the SEC.
• Shareholders are urged to vote 'WITH the Board's recommendations on all proposals' at the 2025 Annual Meeting.
• Specifically, vote FOR Proposal One (Election of Three Class III Directors), Proposal Three (Approval of the A&R 2019 Equity Incentive Plan), and Proposal Four (Approval of the 2025 CEO Performance Award).
• Shareholders must vote by 11:59 pm ET on November 5, 2025.
• The 2025 Annual Meeting will be held on November 6, 2025.

Key Dates

Recommendation

The filing strongly advocates for Tesla's long-term value creation strategy, highlighting exceptional past shareholder returns (over 39,000% since IPO) and a 20x market cap increase. It emphasizes that key proposals, including CEO performance awards, are tied to 'far-reaching performance targets' that, if achieved, would create 'historical value' and 'dwarf even the largest companies in the world'. The company's aggressive stance against proxy advisors, coupled with its ambitious vision for autonomous solutions and AI, suggests a management team highly confident in its ability to deliver future growth and shareholder value, making it a compelling 'strong buy' for investors aligned with this vision.

Keywords

Tesla, SEC filing, proxy statement, shareholder meeting, corporate governance, Elon Musk, CEO compensation, proxy advisors, ISS, Glass Lewis, shareholder vote, TSLA, annual meeting, director election, equity incentive plan