Tesla Stock Slips Ahead of Q3 Print: Chair Robyn Denholm Slams Proxy Firms ISS, Glass Lewis For ‘One-Size-Fits-All’ Governance

• Denholm’s letter urged shareholders to reject “robotic voting” and support all Tesla board proposals at the Nov. 6 annual meeting.
• She defended Elon Musk’s 2025 CEO Performance Award, saying it ties pay to long-term value creation and could lift Tesla’s market cap 7.5 times.
• A union-led “Take Back Tesla” campaign and top proxy firms ISS and Glass Lewis have urged investors to vote against the nearly $1 trillion pay package.

Tesla Inc. shares snapped a two-day winning streak on Tuesday, retreating ahead of the company’s third-quarter (Q3) earnings, after Chairperson Robyn Denholm issued a strongly worded letter criticizing proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis for what she called their “simplistic, one-size-fits-all” governance framework.

The stock fell 1.1% to $442.6 on Tuesday and slipped another 0.2% in after-hours trading.

Denholm Rebukes Proxy Advisors

In a letter to shareholders, Denholm said the firms’ recommendations against Tesla’s proposals were misguided and failed to recognize the company’s unique scale and innovation-led growth. “ISS and Glass Lewis evaluate all companies and all proposals using the same simplistic, one-size-fits-all framework,” she wrote, adding that both firms were “fundamentally unable to evaluate companies, like Tesla, that chart their own course and challenge the status quo.”

Tesla’s chair urged shareholders to “vote with Tesla on all proposals” at the upcoming 2025 Annual Meeting on Nov.6, saying that shareholders should “make an informed, independent vote” ahead of the meeting and “reject robotic voting.”

Denholm noted that Tesla’s market capitalization has risen 20 times since shareholders approved Elon Musk’s 2018 CEO Performance Award, which was opposed by both ISS and Glass Lewis at the time. She said this track record underscores how the advisors’ repeated opposition to Tesla’s proposals has been proven wrong by both “shareholders’ votes and Tesla’s results.”

Defending Musk’s Pay Plan

The letter also defended the 2025 CEO Performance Award, which ties Musk’s potential compensation strictly to ambitious operational and market-cap milestones. Denholm stressed that Musk “gets nothing unless shareholders enjoy exceptional investment returns,” describing the plan as one designed to “supercharge Tesla’s next phase of exceptional growth, innovation, and value creation.”

Under the plan, Musk would only receive rewards if Tesla achieves sustained market capitalization and operational goals, with vesting delayed for at least 7.5 years to ensure long-term alignment. Denholm said the proposal could drive a 7.5x increase in market value at the cost of roughly 13% dilution, arguing that the advisors’ “preoccupation with dilution misses the point that the pie must increase by more than seven-fold.”

Critique Of Governance Concerns

Addressing ISS’s and Glass Lewis’s criticism of Tesla’s board governance, Denholm defended the company’s independent directors, including Ira Ehrenpreis and Kathleen Wilson-Thompson, calling them “widely recognized corporate governance leaders.”

She said both directors have overseen Tesla’s transformation “from an upstart electric vehicle manufacturer to a provider of autonomous solutions,” emphasizing that governance at Tesla “is not an end in and of itself but a necessary ingredient for durable, long-term value creation.”

“Tesla designs and builds robots, but we don’t let robots design our governance structure,” she wrote.

Union-Led Coalition Pushes Back

Separately, a coalition of unions and corporate watchdogs launched a campaign titled “Take Back Tesla” ahead of the quarterly earnings report, urging shareholders to reject Musk’s new pay package, which could be worth nearly $1 trillion in stock. The group, which includes the American Federation of Teachers, Public Citizen, and other activist organizations, said Musk’s “political activities have damaged Tesla’s brand” and argued that the plan does not ensure he will dedicate sufficient focus to the automaker.

TSLA Retail Sentiment Turns Deeply Bearish

On Stocktwits, retail sentiment toward Tesla was ‘extremely bearish,’ hitting its lowest level in nearly five months (26/100) amid ‘low’ message activity.

One user with a bullish view suggested that Tesla shares might trade mostly flat around the $440 level, noting chart support near $420 and $400. The user expected earnings to exceed $0.60 per share, and said the post-results reaction could hinge on Musk’s commentary around robotaxis and AI initiatives, despite limited near-term revenue impact.

Another trader with a bearish stance said they were waiting for the stock to dip to around $400 to accumulate before what they expected to be a rebound toward $450 after earnings.

Tesla’s stock has risen 10% so far in 2025.

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