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Compensation Proposals

Compensation Proposals

Two Proposals Critical for the Future of Tesla

Tesla is at a critical inflection point. A Special Committee of the Board has carefully designed compensation proposals that they view as vital to our ability to continue to create substantial shareholder value. Tesla’s full Board (with Elon and Kimbal recusing themselves) has approved these proposals.

Tesla is not led by an ordinary CEO. Elon is a once-in-a-generation visionary with a unique track record of revolutionizing industries and successfully scaling multiple businesses into multibillion-dollar industry pioneers. Under his continued leadership, Tesla has the potential to generate unprecedented growth and value for shareholders. But, to secure our future, we must approve two critical proposals that will both retain and incentivize Elon to bring our vision for Tesla to life. That is what the Special Committee has designed with Proposals Three and Four.

Proposal Three

Amended & Restated 2019 Equity Incentive Plan

Equity is the cornerstone of Tesla’s compensation philosophy. Amid fierce competition to attract and retain the most skilled AI researchers and engineers, it is essential that we maintain sufficient equity reserves and maximum flexibility. This is is a vote to allow your Board to determine how to attract, retain and incentivize Tesla’s talented workforce—from top to bottom.

Replenish the General Share Reserve: Give Tesla the Flexibility it Needs to Attract, Retain and Motivate Key Talent

+ 60,000,000 Shares

Ensures sufficient equity to continue granting awards to Tesla’s current and future employees, directors and other eligible service providers

Perpetuates our strong ownership culture that aligns employee and shareholder interests and supports shareholder value creation

60 million share increase not to be used for awards to Elon

Create a Special Share Reserve: Eliminate Remaining Uncertainty Around the 2018 CEO Performance Award

+ 207,960,630 Shares

Addresses uncertainty caused by the ongoing Tornetta litigation

Allows the Board the ability to grant the outstanding shares Elon earned under the 2018 CEO Performance Award at any time and at its discretion (regardless of the status of the Tornetta litigation)

Should the Board grant Elon an award before the Tornetta litigation concludes and Tesla prevails in court, the Board has committed that Elon will receive no material additional benefit than he would have under the 2018 CEO Performance Award—there will be no opportunity to “double dip”

Proposal Four

2025 CEO Performance Award

Under Elon’s leadership, Tesla created $735 billion4 of value with the 2018 CEO Performance Award, which received overwhelming support from our shareholders in 2018 and again in 2024. However, Elon has not been permitted to exercise the 2018 CEO Performance Award while it remains contested in the Delaware courts – and there’s currently no go-forward compensation plan in place to incentivize him to continue delivering for Tesla well into the future. As such, the Special Committee has worked diligently over the past seven months to devise the 2025 CEO Performance Award, and the full Board (with Elon and Kimbal recusing themselves) has approved this proposal for the 2025 Annual Meeting.

The 2025 CEO Performance Award builds upon the success of the 2018 CEO Performance Award framework: 100% aligned with shareholders and designed to retain Elon for years to come.

If Elon fails to achieve incredibly ambitious market capitalization AND operational milestones, he earns nothing.

If Elon succeeds in achieving ALL of these milestones, Tesla will have a market capitalization of $8.5 trillion and shareholders will benefit from incredible growth and value creation.

Award Details

For the 2018 CEO Performance Award, Elon had to grow Tesla by billions; for the proposed 2025 CEO Performance Award, he has to grow Tesla by trillions. To be exact, to receive the full Award, he must first create approximately $7.5 trillion5 in additional market capitalization value for shareholders compared to today. He must also meet the extraordinary operational milestones in the 2025 CEO Performance Award. If Elon achieves all the performance milestones, his leadership will propel Tesla to become the most valuable company in history.6

[4] Source: FactSet. Based on change in market value from March 21, 2018 to December 31, 2023.

[5] Note: Based on the difference between $8.5 trillion, the highest market capitalization milestone in the Award, and Tesla’s market capitalization of approximately $1 trillion on September 3, 2025.

[6] Note: Based on market capitalization milestones compared to publicly traded companies as of the date of the definitive proxy statement.

[7] Note: See our definitive proxy statement for the full award terms.

Important Notice

Tesla, Inc. (“Tesla”) has filed with the U.S. Securities and Exchange Commission (the “SEC”) a definitive proxy statement on Schedule 14A (the “Definitive Proxy Statement”) and a proxy card with respect to its solicitation of proxies for Tesla’s 2025 Annual Meeting of Shareholders (the “2025 Annual Meeting”). The Definitive Proxy Statement contains important information about the matters to be voted on at the 2025 Annual Meeting. SHAREHOLDERS OF TESLA ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT TESLA HAS FILED OR WILL FILE WITH THE SEC BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT TESLA AND THE MATTERS TO BE VOTED ON AT THE 2025 ANNUAL MEETING. Shareholders are able to obtain free copies of these documents, and other documents filed with the SEC by Tesla, through the website maintained by the SEC at www.sec.gov. In addition, shareholders are able to obtain free copies of these documents from Tesla by contacting Tesla’s Investor Relations by e-mail at [email protected], or by going to Tesla’s Investor Relations page on its website at ir.tesla.com.

Tesla, its directors (Elon Musk, Robyn Denholm, Ira Ehrenpreis, Joe Gebbia, Jack Hartung, James Murdoch, Kimbal Musk, JB Straubel and Kathleen Wilson-Thompson), and certain of its executive officers (Vaibhav Taneja and Tom Zhu) are deemed to be “participants” (as defined in Section 14(a) of the Securities Exchange Act of 1934, as amended) in the solicitation of proxies from Tesla’s shareholders in connection with the matters to be considered at the 2025 Annual Meeting. Information about the compensation of our named executive officers and our non-employee directors is set forth in the sections titled “Executive Compensation for Fiscal Year 2024” and “Compensation of Directors” in the Definitive Proxy Statement commencing on pages 130 and 152, respectively, and is available here. Information regarding the participants’ holdings of Tesla’s securities can be found in the section titled “Ownership of Securities” in the Definitive Proxy Statement commencing on page 160 and is available here.

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