Tesla Shareholders Back Musk’s Landmark Compensation Plan Amid Market Challenges

Tesla investors have delivered a decisive verdict, granting approval for a groundbreaking ten-year compensation package for CEO Elon Musk that ties his rewards directly to the achievement of extraordinary performance milestones. The market responded with enthusiasm, sending Tesla shares up 3.66 percent in pre-market trading following the announcement. This overwhelming shareholder support comes at a pivotal moment for the electric vehicle manufacturer, which faces significant operational headwinds in one of its most critical markets.

With more than three-quarters of voting shares supporting the proposal, investors sent a clear message about their confidence in Musk's leadership and long-term vision for the company. The compensation structure represents a radical departure from traditional executive pay packages, offering no guaranteed salary but potentially billions in rewards contingent upon Tesla reaching unprecedented targets.

These performance hurdles include achieving a $8.5 trillion market capitalization, annual vehicle deliveries of 20 million units, and technological breakthroughs in both robotaxi services and humanoid robotics. The resounding approval suggests that major investors are prioritizing Musk's continued involvement and the company's transformative ambitions over near-term financial metrics.

Chinese Market Pressures Intensify

While shareholders endorsed Tesla's future direction, current operational realities present a contrasting picture. Recent data from the China Passenger Car Association reveals a dramatic 35.8 percent year-over-year decline in October sales within China, with just 26,006 vehicles delivered—the company's weakest monthly performance in three years.

This substantial downturn reflects intensifying competition from domestic manufacturers including BYD, Nio, and Xpeng, who are rapidly capturing market share with increasingly sophisticated electric vehicles. The sales slump in Tesla's second-largest market poses significant challenges to the company's annual delivery targets and raises concerns about potential consecutive annual sales declines through 2025.

Should investors sell immediately? Or is it worth buying Tesla?

Some relief came from Tesla's Shanghai facility, which exported 35,491 vehicles—a two-year high that partially offset the domestic sales contraction. However, given that the Chinese market contributed over 20 percent of Tesla's total revenue through the first three quarters of the year, sustained weakness threatens both immediate financial performance and strategic positioning.

Leadership Stability and Technological Bets

Compounding these market challenges, Tesla has experienced recent departures among key engineering leadership, including managers responsible for the successful Model Y and the upcoming Cybertruck program. These exits potentially signal internal strains as the company navigates simultaneous production scaling and technological innovation.

In response to mounting competitive pressures, Tesla is increasingly staking its future on technological differentiation. Musk has targeted early 2026 for obtaining full regulatory approval of the Full Self-Driving (FSD) software in China—a development that could potentially reverse the company's fortunes in this crucial market. However, financial analysts remain cautious, with Truist Securities maintaining its "Hold" rating on Tesla shares while citing elevated risks associated with this technology-focused strategy.

The central question facing investors is whether Musk can successfully bridge the growing divide between visionary long-term objectives and immediate operational execution across Tesla's global business units.