As Tesla Q3 Profits Plunge 31%, Musk Warns: No Mega Pay Package, No Full Commitment

TradingKey - Despite record-breaking quarterly deliveries and double-digit revenue growth exceeding expectations, Tesla’s third-quarter earnings highlighted significant pressure on profit recovery. CEO Elon Musk is using the Q3 earnings window to pressure shareholders ahead of a crucial vote on his proposed $1 trillion pay plan, suggesting he needs greater stock control to drive Tesla’s next phase of growth.

After U.S. markets closed on October 22, Tesla released its mixed Q3 2025 results. The U.S. electric vehicle leader reversed its Q2 revenue decline — rebounding from a 12% year-on-year drop to a 12% gain — but earnings per share (EPS) fell 31% YoY, accelerating from Q2’s 23% decline and missing analyst forecasts. Tesla shares dropped 4% in after-hours trading.

Since leaving his role overseeing government cost-cutting efforts at the Department of Government Efficiency (D.O.G.E.), Musk has refocused on Tesla. However, his actions so far appear limited and largely within market expectations:

• Expansion of Robotaxi services
• Launch of lower-priced models
• Plans for new vehicles and robot production

Tesla’s forward guidance remained unchanged from Q2, with no disclosure of production or sales targets and repeated statements about the difficulty of assessing tariff impacts.

The $1 Trillion Pay Package: A Game-Changing Proposal

Amid this cautious outlook, Tesla’s board has introduced a potential game-changer: a CEO pay plan worth up to $1 trillion, contingent on Musk achieving ambitious performance goals — such as scaling the Robotaxi business and growing Tesla’s market cap from $1 trillion to over $8.5 trillion.

The proposal will be put to a shareholder vote at Tesla’s annual meeting on November 6. Musk supports the plan as essential for securing long-term influence over the company, while influential proxy advisors have raised red flags.

Glass Lewis, a major proxy advisory firm, warned that the proposed pay plan could lead to significant equity dilution and questioned several of its terms.

Another advisor, ISS (Institutional Shareholder Services), noted that while the primary goal is to retain Musk and ensure his continued focus on Tesla — rather than diverting attention to other ventures like SpaceX or X — the plan does not clearly define how this commitment would be enforced.

Musk Fires Back

During the Q3 earnings call, Musk addressed the controversy around the pay package, stating he simply wants enough voting power to maintain meaningful influence.

“I just think that there needs to be enough voting control to give a strong influence. But not not so much that I can’t be fired if I go insane.”

He added:

“I just don’t feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass Lewis who have no freaking clue.”

CFO Vaibhav Taneja emphasized that the structure ensures Musk earns nothing unless shareholders achieve substantial returns.