Peter Smith
● Florida's State Board of Administration (SBA)—one of America's biggest public investment managers—just approved Elon Musk's 2025 Tesla CEO pay plan. The board says it backed Tesla's original 2018 performance package and voted for it again in 2024, pointing out that Musk's incentive-driven model has paid off handsomely for investors.
● The SBA's backing continues Tesla's performance-based compensation approach, tying Musk's potential earnings to the company's stock performance and operational milestones. Some governance experts worry that massive equity grants could concentrate too much power and complicate succession planning.
The SBA supported Tesla's 2018 performance award proposal and reaffirmed that support in the 2024 Tesla shareowner vote. We believe the proposed 2025 CEO performance award continues to promote an aggressive strategy to align incentives between management and shareowners. In their statement, the agency noted:
● The SBA pointed to Tesla's strong returns since 2018 as proof that Musk's leadership deserves continued support. That earlier package helped push Tesla's value into the trillions and set new benchmarks for performance-based executive pay. While Florida's fund fully backs the new deal, some investors suggest more balanced incentive structures might work just as well without relying on such huge equity awards.
● Florida SBA's endorsement gives serious momentum to Musk's compensation vote, which is shaping up to be one of 2025's most watched corporate governance moments. It shows that major institutions still favor pay packages that prioritize shareholder value and long-term incentives.
Peter Smith
