DEF 14A of Tesla, Inc., Sep 17, 2025

DEF 14A of Tesla, Inc.

Filed Sep 17, 2025 · FY20220001104659-25-090866

Open on EDGAR

  1. Proxy Statement for 2025 Annual Meeting of Shareholders

    | 150 | Outstanding Equity Awards at 2024 Fiscal Year-End | | 151 | 2024 Option Exercises and Stock Vested | | 151 | Potential Payments Upon Termination or Change in Control as of December 31, 2024 | | 151 | 2024 Pay Ratio Disclosure | | 152 | Compensation of Directors | | 154 | Pledging of Shares | | 155 | Equity Compensation Plan Information | | 157 | Certain Relationships and Related Person Transactions | | 157 | Review of Related Person Transactions | | 157 | Related Person Transactions | | 158 | Shareholder Proposal Regarding Board Authorization of Investment in xAI | | 158 | Other Transactions | | 159 | Delinquent Section 16(a) Reports | | 160 | Ownership of Securities | | 162 | Audit Related Matters | | 165 | Other Matters | | 166 | Questions and Answers About the 2025 Annual Meeting and Procedural Matters | | A-1 | Annex A — Special Committee Report | | B-1 | Annex B — A&R 2019 Equity Incentive Plan | | C-1 | Annex C — 2025 CEO Performance Award Agreement | | D-1 | Annex D — Voting Agreement | | E-1 | Annex E — First Amended and Restated Certificate of Formation | | F-1 | Annex F — Second Amended and Restated Bylaws |

  2. Proxy Statement for 2025 Annual Meeting of Shareholders

    | 121 | Commitment of Our Directors | | 128 | Stock Ownership by the Board and Management | | 151 | 2024 Pay Ratio Disclosure | | 154 | Pledging of Shares | | 157 | Related Person Transactions | | 178 | Who Can Help Answer My Questions on Voting? |

  3. Nominees for Class III Directors

    Nominees for Class III Directors Three candidates have been nominated for election as Class III directors at the 2025 Annual Meeting, each for a three-year term expiring in 2028. Upon recommendation of the Nominating and Corporate Governance Committee, the Board has nominated Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson for election as Class III directors. Biographical information about each of the nominees is contained in the following section. A discussion of the qualifications, attributes and skills of each nominee that led the Board and the Nominating and Corporate Governance Committee to the conclusion that he or she should be elected or continue to serve as a director follows each of the director and nominee biographies. If you are a shareholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the election of Messrs. Ehrenpreis and Gebbia and Ms. Wilson-Thompson. Each of Messrs. Ehrenpreis and Gebbia and Ms. Wilson-Thompson has accepted such nomination; however, in the event that a nominee is unable or declines to serve as a director at the time of the 2025 Annual Meeting, the proxies will be voted for any nominee who shall be designated by the Board to fill such vacancy. If you wish to give specific instructions with respect to the voting of directors, you may do so by indicating your instructions on your proxy card or when you vote by telephone or over the Internet. If you are a beneficial owner holding your shares in street name and you do not give voting instructions to your broker, bank or other intermediary, that organization will leave your shares unvoted on this matter.

  4. Nominees for Class III Directors

    | | The Board recommends a vote FOR the Tesla proposal to elect Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson. |

  5. Information Regarding the Board and Director Nominees

    Information Regarding the Board and Director Nominees The names of the members of the Board and Tesla’s director nominees, their respective ages, their positions with Tesla and other biographical information as of September 17, 2025, are set forth below. Two of our nine directors are female and one is racially/ethnically diverse. Except for Messrs. Elon Musk (“Mr. Musk”), our Chief Executive Officer and a director, and Kimbal Musk (“Mr. Kimbal Musk”), a director, who are brothers, there are no other family relationships among any of our directors or executive officers. As discussed above in “Proposal One — Tesla Proposal to Elect Three Class III Directors,” our Board is divided into three classes, as set forth in the chart below.

  6. Information Regarding the Board and Director Nominees

    | Class I Directors | Class II Directors | Class III Directors | | Robyn Denholm (Chair) | James Murdoch | Ira Ehrenpreis | | JB Straubel | Kimbal Musk | Joe Gebbia | | Elon Musk | Jack Hartung | Kathleen Wilson-Thompson |

  7. Information Regarding the Board and Director Nominees

    In addition to serving on the Board, some of our directors also serve on the Board’s Committees, as set forth in the chart below.

  8. Information Regarding the Board and Director Nominees

    | Name | Chair of the Board | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | Disclosure Controls Committee | | Elon Musk | | | | | | | Robyn Denholm | | | | | | | Ira Ehrenpreis | | | | | | | Joe Gebbia | | | | | | | Jack Hartung | | | | | | | James Murdoch | | | | | | | Kimbal Musk | | | | | | | JB Straubel | | | | | | | Kathleen Wilson-Thompson | | | | | |

  9. Information Regarding the Board and Director Nominees

    In 2025, Tesla updated our Corporate Governance Guidelines to clarify that Board members are expected to invest the time and effort necessary to understand and oversee the implementation of the Company’s business and financial strategies, including, without limitation, in areas such as sustainability and AI.

  10. Director Bios

    Director Bios

  11. Director Bios

    | ELON MUSK Age: 54 Director Since: 2004 Term of Office: Expires in 2026 |

  12. Director Bios

    | Impact As our Chief Executive Officer, one of our founders and our largest shareholder, Mr. Musk brings historical knowledge, operational and technical expertise and continuity to the Board. Mr. Musk guided Tesla from an early-stage startup, through its IPO in 2010, to transformative growth into one of the most valuable companies in the world. Mr. Musk’s leadership and unique vision to build the world’s next generation of sustainable and accessible innovation has played a key role in our mission to accelerate the world’s transition to sustainable energy. Career Highlights Mr. Musk is the Technoking of Tesla and has served as our Chief Executive Officer since October 2008. Mr. Musk has also served as Chief Executive Officer, Chief Technology Officer and Chairman of Space Exploration Technologies Corporation, a company which develops and launches advanced rockets and spacecraft (“SpaceX”), since May 2002, served as Chairman of the Board of a solar installation company, SolarCity, from July 2006 until its acquisition by us in November 2016, served as Chief Technology Officer of X Corp, a social media company (“X”), since October 2022 and served as the Chief Executive Officer and Treasurer of x.AI Corp, an artificial intelligence company (“xAI”), since March 2023. Following the March 2025 merger of X and xAI, he now serves as the Chief Executive Officer of X.AI Holdings Corp. Mr. Musk is also a founder of The Boring Company (“TBC”), an infrastructure company, and Neuralink Corporation, a company focused on developing brain-machine interfaces. Prior to SpaceX, Mr. Musk co-founded PayPal, an electronic payment system, which was acquired by eBay in October 2002, and Zip2 Corporation, a provider of Internet enterprise software and services, which was acquired by Compaq in March 1999. Mr. Musk also served on the board of directors of Endeavor Group Holdings, Inc. from April 2021 to June 2022. Mr. Musk holds a B.A. in Physics from the University of Pennsylvania and a B.S. in Business from the Wharton School of the University of Pennsylvania. |

  13. Director Bios

    | ROBYN DENHOLM Age: 62 Director Since: 2014 Term of Office: Expires in 2026 Committee Membership • Audit (Chair) • Compensation • Nominating and Corporate Governance • Disclosure Controls (Chair) |

  14. Director Bios

    | Impact Ms. Denholm brings nearly 30 years of executive leadership experience at both NYSE and Nasdaq listed companies, including significant risk management, financial and accounting expertise, as well as technology leadership experience. Ms. Denholm has extensive knowledge of both the automotive and technology industries, including serving as the Chief Financial Officer and Chief Operations Officer of two technology companies. Career Highlights Ms. Denholm has been Chair of the Board since November 2018. In January 2021, Ms. Denholm joined Blackbird Ventures (“Blackbird”), a venture capital firm, as an Operating Partner, where she works with the founders of later-stage technology companies. In 2024, she transitioned to a role on Blackbird’s board of directors. Ms. Denholm actively champions the Australian technology sector and was the Inaugural Chair of the Technology Council of Australia, on which she currently serves as a board director. She also founded Wollemi Capital Group in 2021, with a mission to invest in ventures that deliver a positive impact. The firm’s investment portfolio spans environmental, venture capital and community focused investments, and includes majority ownership in two professional basketball teams, the Sydney Kings and Sydney Flames, and most recently, the majority ownership of the Women’s National Basketball league in Australia. From January 2017 through June 2019, Ms. Denholm was with Telstra Corporation Limited, a telecommunications company (“Telstra”), where she served as Chief Financial Officer and Head of Strategy from October 2018 through June 2019, and Chief Operations Officer from January 2017 to October 2018. Prior to Telstra, from August 2007 to July 2016, Ms. Denholm was with Juniper Networks, Inc., a manufacturer of networking equipment, serving in executive roles including Executive Vice President, Chief Financial Officer and Chief Operations Officer. Prior to joining Juniper Networks, Ms. Denholm served in various executive roles at Sun Microsystems, Inc. from January 1996 to August 2007. Ms. Denholm also served at Toyota Motor Corporation Australia for seven years and at Arthur Andersen & Company for five years in various finance assignments. Ms. Denholm previously served as a director of ABB Ltd. Ms. Denholm is a Fellow of the Institute of Chartered Accountants of Australia/New Zealand, a member of the Australian Institute of Company Directors, and holds a Bachelor’s degree in Economics from the University of Sydney and a Master’s degree in Commerce and a Doctor of Business Administration (honoris causa) from the University of New South Wales. |

  15. Director Bios

    | IRA EHRENPREIS Age: 56 Director Since: 2007 Term of Office: Expires in 2025 Committee Membership • Compensation (Chair) • Nominating and Corporate Governance (Chair) |

  16. Director Bios

    | Impact Mr. Ehrenpreis is an acknowledged leader in the energy, technology, impact and venture capital industries, where he serves on several industry boards, and brings valuable insights in corporate governance, strategic growth and shareholder values. Mr. Ehrenpreis’ tenure on Tesla’s Board also provides the Company with stability and experience as it navigates through different challenges. Career Highlights Mr. Ehrenpreis has been a venture capitalist since 1996. He is a founder and managing member of DBL Partners, a leading impact investing venture capital firm formed in 2015. Previously, he led the Energy Innovation practice at Technology Partners. Mr. Ehrenpreis has served on the board and Executive Committee, including as Annual Meeting Chairman of the National Venture Capital Association (NVCA). Mr. Ehrenpreis currently serves as the Chairman of the VCNetwork, the largest and most active California venture capital organization, and as the President of the Western Association of Venture Capitalists (WAVC), the oldest venture capital organization in California. Mr. Ehrenpreis is also deeply involved in the energy technology sector. He currently serves on the National Renewable Energy Laboratory (NREL) Advisory Council, the University of Texas at Austin Energy Institute Advisory Board, and the Stanford Precourt Institute for Energy Advisory Council, and has served on the advisory boards of many industry groups, including the American Council on Renewable Energy, the Cleantech Venture Network (Past Chairman of Advisory Board) and the Stanford Global Climate and Energy Project (GCEP). He was also Chairman of the Clean-Tech Investor Summit for nine years. Mr. Ehrenpreis served for years as the Chairman of the Silicon Valley Innovation & Entrepreneurship Forum (SVIEF) and on the Advisory Board of the Forum for Women Entrepreneurs (FWE). Mr. Ehrenpreis is an inductee of the International Green Industry Hall of Fame. In 2018, the National Venture Capital Association awarded Mr. Ehrenpreis with the industry’s “Outstanding Service Award” for career contributions to the venture capital industry. In 2023, the Japan Society of Northern California honored Mr. Ehrenpreis with its 2023 Visionary Award for his “Pioneering Leadership in Impact Investing and the Global Sustainability Community.” Mr. Ehrenpreis was awarded the 2018 NACD Directorship 100 for his influential leadership in the boardroom and corporate governance community. Mr. Ehrenpreis holds a B.A. from the University of California, Los Angeles and a J.D. and M.B.A. from Stanford University. |

  17. Director Bios

    | JOE GEBBIA Age: 44 Director Since: 2022 Term of Office: Expires in 2025 Committee Membership • Audit |

  18. Director Bios

    | Impact Mr. Gebbia has valuable experience derived from founding and leading a global public company. The Board benefits from his entrepreneurial background, as well as his experience in design, innovation, brand development and management of complex regulatory environments. Career Highlights Mr. Gebbia co-founded Airbnb, Inc. in 2008 and has served on Airbnb’s board of directors since 2009. In 2022, Mr. Gebbia launched Samara, which produces fully customized, factory-made homes designed to create rental income, house family, support work from home, or bundled together, to form new types of housing communities. Mr. Gebbia received dual degrees in Graphic Design and Industrial Design from the Rhode Island School of Design. In August 2025, Mr. Gebbia was named the U.S.’s first Chief Design Officer and now spearheads the new National Design Studio to work on a Presidential initiative called “America by Design” to modernize the digital interfaces that serve everyday citizens. Mr. Gebbia is a sought-after speaker on design and entrepreneurship. He was named to the Texas Business Hall of Fame, and across his career, his work has been seen in thousands of press articles worldwide, including personal distinctions such as Inc. Magazine’s Thirty-under-Thirty, Fortune’s Forty-under-Forty, and one of Fast Company’s Most Creative People. |

  19. Director Bios

    | JACK HARTUNG Age: 68 Director Since: 2025 Term of Office: Expires in 2027 Committee Membership • Audit |

  20. Director Bios

    | Impact Mr. Hartung brings a proven track record of executive leadership, with experience overseeing financial and reporting functions at multiple public companies. Mr. Hartung also provides valuable experience in the areas of business transformation and customer engagement. Career Highlights Mr. Hartung is currently a senior advisor at Chipotle Mexican Grill, Inc. (“Chipotle”), and most recently served as President and Chief Strategy Officer of Chipotle from October 2024 to May 2025. Mr. Hartung joined Chipotle in 2002 and held various roles, including Chief Financial and Administrative Officer, where he was responsible for all finance and accounting functions as well as supply chain, strategy, and safety and asset protection. Prior to Chipotle, he spent 18 years at McDonald’s Corp., where he held a variety of management positions, most recently as Vice President and Chief Financial Officer of its Partner Brands Group. Mr. Hartung has served on the boards of directors of The Honest Company, since May 2022, and Portillo’s Inc. since January 2025. He has also served on the Board of ZocDoc, Inc. since January 2022. Mr. Hartung has a Bachelor of Science degree in Accounting and Economics and an MBA from Illinois State University and is CPA and CMA (both not currently practicing). |

  21. Director Bios

    | JAMES MURDOCH Age: 52 Director Since: 2017 Term of Office: Expires in 2027 Committee Membership • Audit • Nominating and Corporate Governance • Disclosure Controls |

  22. Director Bios

    | Impact Mr. Murdoch brings to the Board his decades of executive and board experience across numerous companies. Tesla’s Board benefits from his extensive knowledge of international markets and strategies and experience with the adoption of new technologies. Career Highlights Mr. Murdoch has been the Chief Executive Officer of Lupa Systems, a private holding company that he founded, since March 2019. Previously, Mr. Murdoch held a number of leadership roles at Twenty-First Century Fox, Inc., a media company (“21CF”), over two decades, including its Chief Executive Officer from 2015 to March 2019, its Co-Chief Operating Officer from 2014 to 2015, its Deputy Chief Operating Officer and Chairman and Chief Executive Officer, International from 2011 to 2014 and its Chairman and Chief Executive, Europe and Asia from 2007 to 2011. Previously, he served as the Chief Executive Officer of Sky plc from 2003 to 2007, and as the Chairman and Chief Executive Officer of STAR Group Limited, a subsidiary of 21CF, from 2000 to 2003. Mr. Murdoch formerly served on the board of News Corporation from 2013 to 2020. In addition, he has served on the boards of 21CF, Sky plc, GlaxoSmithKline plc and Sotheby’s. |

  23. Director Bios

    | KIMBAL MUSK Age: 52 Director Since: 2004 Term of Office: Expires in 2027 |

  24. Director Bios

    | Impact Mr. Kimbal Musk has extensive senior leadership business experience in the technology, retail and consumer markets, and a robust understanding of mission-driven ventures. Mr. Kimbal Musk also provides valuable expertise based on his experience on the Tesla Board and is able to apply his unique understanding of the business to the strategy and execution of the Company. Career Highlights Mr. Kimbal Musk is co-founder and Executive Chairman of The Kitchen Restaurant Group, a growing family of businesses with the goal of providing all Americans with access to real food that was founded in 2004. In 2010, Mr. Kimbal Musk became the Executive Director of Big Green (formerly The Kitchen Community), a non-profit organization that creates learning gardens in schools across the United States. Mr. Kimbal Musk also co-founded Square Roots, an urban farming company growing fresh, local greens in climate-controlled, AI equipped shipping containers, in 2016, and serves as its Chairman. In 2022, Mr. Kimbal Musk founded Nova Sky Stories, with a mission to empower producers and artists to bring art to the skies with drone light shows, and serves as its Chief Executive Officer. Previously, Mr. Kimbal Musk was a co-founder of Zip2 Corporation, a provider of Internet enterprise software and services, which was acquired by Compaq in March 1999. In 2006, Mr. Kimbal Musk became CEO of OneRiot, a realtime search engine that was acquired by Walmart in 2011. In addition, Mr. Kimbal Musk has served on the boards of SpaceX and Chipotle. Mr. Kimbal Musk holds a B. Comm. in Business from Queen’s University and is a graduate of The French Culinary Institute in New York City. |

  25. Director Bios

    | JB STRAUBEL Age: 49 Director Since: 2023 Term of Office: Expires in 2026 |

  26. Director Bios

    | Impact As a co-founder and one of the key members of Tesla’s leadership team for over a decade, Mr. Straubel brings extensive operational experience and in-house knowledge of Tesla’s technology, research and development and business management. Mr. Straubel also provides valuable expertise in the areas of cleantech and batteries. Career Highlights Mr. Straubel is the Founder and Chief Executive Officer of Redwood Materials Inc., a Nevada-based company (“Redwood”) working to drive down the costs and environmental footprint of lithium-ion batteries by offering large-scale sources of domestic anode and cathode materials produced from recycled batteries. Mr. Straubel also co-founded and served as the Chief Technology Officer of Tesla from May 2005 to July 2019. Mr. Straubel previously served on the board of SolarCity and as a member of its Nominating and Corporate Governance Committee from August 2006 until its acquisition by Tesla in November 2016. Mr. Straubel has served on the board of directors of QuantumScape since November 2020. Mr. Straubel holds a B.S. in Energy Systems Engineering and an M.S. in Engineering, with an emphasis on energy conversion, from Stanford University. |

  27. Director Bios

    | KATHLEEN WILSON-THOMPSON Age: 68 Director Since: 2018 Term of Office: Expires in 2025 Committee Membership • Compensation • Nominating and Corporate Governance • Disclosure Controls |

  28. Director Bios

    | Impact Ms. Wilson-Thompson brings extensive executive and board experience at both consumer-focused and industrial companies. In addition, her expertise in managing human resources, employment law and other operations at mature companies with large workforces provides the Board with valuable insight and advice for workforce management and relations as Tesla continues to expand. Career Highlights Ms. Wilson-Thompson served as Executive Vice President and Global Chief Human Resources Officer of Walgreens Boots Alliance, Inc. (“Walgreens”), a global pharmacy and wellbeing company, from December 2014 until her retirement in January 2021, and previously served as Senior Vice President and Chief Human Resources Officer from January 2010 to December 2014 at Walgreens. Prior to Walgreens, Ms. Wilson-Thompson held various legal and operational roles at The Kellogg Company, a food manufacturing company, from January 1991 to December 2009, including most recently as its Senior Vice President, Global Human Resources. Ms. Wilson-Thompson has served on the board of directors of Wolverine World Wide, Inc. since May 2021 and McKesson Corporation since January 2022. She has also served on the board of directors of Health Care Service Corporation since October 2024. Ms. Wilson-Thompson previously served on the board of directors of Ashland Global Holdings Inc. from 2017 to 2020. Ms. Wilson-Thompson holds an A.B. in English Literature from the University of Michigan and a J.D. and LL.M. (Corporate and Finance Law) from Wayne State University. |

  29. Summary of the 2024 Executive Compensation Program

    Summary of the 2024 Executive Compensation Program The following is a summary of some of the key points of our 2024 executive compensation program that are subject to this proposal: • Tesla continued to emphasize structuring compensation incentives to reward our NEOs based on performance. Equity awards weighed heavily in our NEOs’ total compensation, including awards that vest upon the achievement of clear and measurable milestones. Since these awards increase in value as our stock price increases (and in the case of stock option awards, have no value unless our stock price increases following their grant), our NEOs’ incentives were closely aligned with the long-term interests of our shareholders. Since 2020, equity awards granted to our NEOs have primarily been in the form of stock options: Xiaotong (Tom) Zhu, our Senior Vice President, APAC and Global Vehicle Manufacturing, received 100% of his equity award in the form of stock option awards upon his promotion to such role in 2023, and Vaibhav Taneja, our Chief Financial Officer, received approximately 80% of his equity award in the form of stock options in 2024, following the 2024 review of our compensation programs as discussed in the “Executive Compensation for Fiscal Year 2024 — Compensation Discussion and Analysis — Compensation Philosophy” section below and in consideration of his promotion in August 2023 to the role of Chief Financial Officer. As a result, a significant portion of our NEOs’ total compensation was entirely at risk, depending on long-term stock price performance. Tesla had no cash bonus program for any of our NEOs and generally did not provide any perquisites or tax reimbursements to our NEOs not available to other employees. No NEO currently has any severance or change of control arrangement. • Each NEO was employed at will and was expected to demonstrate exceptional personal performance in order to continue serving as a member of the executive team. • Mr. Musk, our Chief Executive Officer, historically earned a base salary that reflected the applicable minimum wage requirements under California law, and he was subject to income taxes based on such base salary. However, he has never accepted his salary. Commencing in May 2019 at Mr. Musk’s request, we eliminated altogether the earning and accrual of this base salary. Mr. Musk received no compensation in 2024. In 2024, his only unexercised compensation consisted of the vested stock options under the 10-year performance-based stock option award granted to him in January 2018 (the “2018 CEO Performance Award”), which had vested in full prior to 2024. • In particular, the 2018 CEO Performance Award consisted of 12 equal tranches, each of which vested upon the achievement of a market capitalization milestone matched to one of eight revenue-based operational milestones or eight Adjusted EBITDA-based operational milestones, all of which were viewed as difficult hurdles at the time of grant. While our shareholders benefit from each incremental increase in Tesla’s performance and stock price, aligning their interests with Mr. Musk’s incentives, the tranches under the 2018 CEO Performance Award vested only upon the full achievement of specific milestones, making it even more challenging for Mr. Musk to realize value from such increases. As of the date of this proxy statement, all of the tranches have vested and become exercisable, subject to Mr. Musk’s payment of the exercise price of $23.34 per share, as adjusted to give effect to the three-for-one stock split effected in the form of a stock dividend in August 2022 (the “2022 Stock Split”) and the five-for-one stock split effected in the form of a stock dividend in August 2020 (the “2020 Stock Split”). Additionally, a minimum five-year holding period applies to any shares Mr. Musk acquires upon exercising any of the options. See “Executive Compensation for Fiscal Year 2024 — Compensation Discussion and Analysis — 2024 Chief Executive Officer Compensation” below for more details. The 2025 CEO Interim Award and the 2025 CEO Performance Award were not features of the 2024 executive compensation program, as both awards were granted to Mr. Musk after the end of the 2024 fiscal year. See “Proposal Three — Tesla Proposal for Approval of the A&R 2019 Equity Incentive Plan” and “Proposal Four — Tesla Proposal for Approval of the 2025 CEO Performance Award” below for more details. For detailed information about Tesla’s executive compensation program, see the “Executive Compensation for Fiscal Year 2024” section on page 130 through page 156 below. Tesla believes that the information provided above and within the “Executive Compensation for Fiscal Year 2024” section of this proxy statement (on page 130 through page 156 below) demonstrates that Tesla’s executive compensation program for fiscal year 2024 was designed appropriately and aligned management’s interests with our shareholders’ interests to support long-term value creation.

  30. Background of Proposals Three and Four and Background and Approval Process of the Special Committee

    Background of Proposals Three and Four and Background and Approval Process of the Special Committee At the 2025 Annual Meeting, we are asking our shareholders to approve two proposals related to Mr. Musk’s compensation as Tesla’s Chief Executive Officer. Proposals Three and Four request your approval of an Amended and Restated 2019 Equity Incentive Plan (the “A&R 2019 Equity Incentive Plan”) and a new performance-based restricted stock award to Mr. Musk (the “2025 CEO Performance Award”). In addition to addressing Mr. Musk’s compensation, Proposal Three and its replenishment of the share pool available for all employees, directors and other eligible service providers (the “General Share Reserve”) is also critical for Tesla’s ability to continue compensating its employees in the particularly competitive AI labor market in which we operate. Over the past two decades, Mr. Musk has led Tesla on a remarkable journey that saw Tesla grow from an EV upstart to one of the largest and most valuable companies in the world. Despite Mr. Musk having struck an agreement with Tesla and its shareholders and guiding Tesla through a period of growth that saw its market capitalization increase by more than 20x since March 2018, Mr. Musk had not received meaningful compensation, prior to the 2025 CEO Interim Award (as defined below) for his services to Tesla since he last achieved the milestones specified in the 2012 CEO Performance Award (as defined below), in 2017 — nearly eight years ago. Mr. Musk — like all of our shareholders — wants to see Tesla continue its record-breaking growth and achieve its ambitions. The Board is excited about the opportunity that these compensation proposals represent for Tesla to retain Mr. Musk, who recently unveiled Master Plan, Part IV, which focuses on the concept of Sustainable Abundance. Proposals Three and Four represent recognition of Mr. Musk’s past and present efforts and endorsement of his singular role in leading Tesla into the future. To Tesla, Proposals Three and Four represent a critical opportunity to retain and incentivize Mr. Musk to drive Tesla to become the most valuable company in the world. Proposals Three and Four follow our recent grant of restricted stock to Mr. Musk in August 2025 (the “2025 CEO Interim Award”), the first step in compensating Mr. Musk commensurate with his contributions to Tesla and our shareholders. Together with the 2025 CEO Interim Award, Proposals Three and Four represent a comprehensive plan to retain and incentivize Mr. Musk to lead Tesla through a new period of transformative growth. Furthermore, Proposal Three gives us an opportunity to alleviate the need for further shareholder votes as we navigate the uncertainty of the ongoing Delaware litigation, while also replenishing the General Share Reserve under Tesla’s 2019 Equity Incentive Plan (the “2019 Plan”), a step that the Board believes is critical for Tesla to properly compensate and motivate all of its employees through our 2027 meeting of shareholders. Proposals Three and Four are being presented to Tesla’s shareholders for approval following the recommendations of the Special Committee (as defined below) and the Board (with Mr. Musk and Mr. Kimbal Musk recused). What follows is only a summary of the background of Proposals Three and Four and the process undertaken by the Special Committee. The Special Committee’s review is described in its report (the “Special Committee Report”), which is attached hereto as Annex A and incorporated by reference herein. This summary is included to provide you with the relevant context for your vote on Proposals Three and Four. This summary (including the description of and definitions used for the Product Goals (as defined below)) is qualified in its entirety by reference to the Special Committee Report. Shareholders are encouraged to read the entirety of the Special Committee Report for further information regarding the background of and process undertaken by the Special Committee.

  31. The 2012 CEO Performance Award

    The 2012 CEO Performance Award In 2012, the Board approved a compensation program for Mr. Musk that consisted entirely of performance stock options that would vest only upon the achievement of certain market capitalization and operational milestones (the “2012 CEO Performance Award”). At the time, Tesla had begun to execute Mr. Musk’s roadmap for Tesla’s future, “The Secret Tesla Motors Master Plan” (the “Original Master Plan”), which laid out the objectives for Tesla during the first phase of its development. Tesla had yet to begin volume production of Model S and had a market capitalization of under $4 billion. The 2012 CEO Performance Award included 10 tranches, with the vesting of each tranche requiring Tesla both to (i) grow market capitalization by an additional $4 billion and (ii) achieve an additional specified operational milestone. Following the grant of the 2012 CEO Performance Award, Tesla received strong shareholder support in its triennial advisory “Say on Pay” votes in 2014 and 2017 (94.4% and 98.9%, respectively, of the shares present or represented by proxy and entitled to vote). Between 2012 and 2018, Tesla, with Mr. Musk at the helm, launched and ramped up production of Model S; designed, launched and ramped up production of Model X and Model 3; and added important new business lines, including solar energy generation and energy storage, among other things.

  32. The 2018 CEO Performance Award

    The 2018 CEO Performance Award In 2017, with the 2012 CEO Performance Award nearing completion and Tesla entering the next phase of its development, the Board sought to develop a compensation award for Mr. Musk that reflected Tesla’s then-current long-term goals and strategy and incentivized their achievement. The 2018 CEO Performance Award was the result of this effort. The independent members of the Board at the time, led by the members of the Compensation Committee, designed a compensation award over the course of six months that they believed would incentivize Mr. Musk while maximizing value for Tesla’s shareholders. Mr. Musk and Mr. Kimbal Musk recused themselves from each of the relevant meetings. As part of this process, the Compensation Committee and the Board sought to balance a variety of important objectives, including: • Aligning Mr. Musk’s interests with those of Tesla and its other shareholders; • Incentivizing Mr. Musk to continue to lead Tesla over the long term; • Motivating Mr. Musk to help Tesla achieve market capitalization and operational milestones that would generate significant shareholder value; and • Ensuring that Mr. Musk’s compensation would be linked entirely to performance so that he did not receive any compensation unless Tesla’s shareholders benefited from significant value creation. The Board also sought and obtained feedback from a broad set of institutional shareholders and incorporated that feedback into its decision-making process. With Mr. Musk’s innovation and vision driving Tesla to become the world’s first vertically integrated sustainable energy company, with a wide variety of products, from generation to storage to consumption, the Board believed that under Mr. Musk’s continued leadership Tesla had the potential to become “one of the most valuable companies in the world.”(1) The 2018 CEO Performance Award was based on the ambitious vision of making Tesla a $650 billion company, which would require a more than tenfold growth in Tesla’s market capitalization, notwithstanding that it was already significantly more valuable than any other North American automotive company. The Board gave the following three reasons for its recommendation that shareholders approve the 2018 CEO Performance Award: 1. Strengthening Incentives and Further Aligning of Shareholder, Company and CEO Interests The Board believed in rewarding Mr. Musk in a fair way that provided compensation to him if, and only if, Tesla’s shareholders realized significant value. The 2018 CEO Performance Award was a true “pay-for-performance” compensation program that tightly aligned Mr. Musk’s interests with the interests of Tesla and its shareholders. Accordingly, Mr. Musk would receive no cash salary, no cash bonuses and no time-based equity awards (i.e., awards that vest solely through the passage of time) under the terms of the 2018 CEO Performance Award. To the contrary, his only opportunity for compensation from Tesla would require him to lead Tesla in achieving monumentally challenging market capitalization and operational milestones. The 2018 CEO Performance Award created even more shareholder alignment by incorporating features such as a five-year holding period to ensure Mr. Musk’s continuing alignment with Tesla’s interests. 2. Securing Mr. Musk’s Continued Services The Board believed in 2018 that the active and engaged services of Mr. Musk were important to the continued growth and long-term interests of Tesla, based on the Board’s belief and observation that Tesla’s prior successes were driven significantly by Mr. Musk’s leadership. Those successes included making Model S the top-selling car in its segment in many key markets around the world and ramping up its production, designing and scaling production of Model X, which continued to See Exhibit 99.1 to Tesla’s Current Report on Form 8-K filed with the SEC on January 23, 2018: “Tesla today announced a new 10-year CEO performance award for Elon Musk with vesting entirely contingent on achieving market cap and operational milestones that would make Tesla one of the most valuable companies in the world.” gain substantial market share around the world, and designing and beginning to scale production of Model 3, the mass-market vehicle enabled by the success of Model S and Model X. These accomplishments had led to significant value creation for Tesla’s shareholders. Since going public in 2010, Tesla’s market capitalization had grown almost 35x by the time the Board approved the 2018 CEO Performance Award. The Board designed the 2018 CEO Performance Award to incentivize and motivate Mr. Musk to continue to not only lead Tesla over the long term but, particularly in light of his other business interests, to focus his time and energy on doing so. Musk himself has acknowledged that he is motivated by the all-or-nothing, pay-for-performance award design. Mr. Musk was required to remain as our Chief Executive Officer or serve as both Executive Chairman and Chief Product Officer, in each case with all leadership ultimately reporting to him, at the time each milestone was met in order for the corresponding tranche to vest. This was intended to ensure that Mr. Musk would continue to lead the management of Tesla over the long term while also providing the flexibility for the future. 3. Spurring the Achievement of Tesla’s Strategic and Financial Objectives The Board believed in 2018 that the 2012 CEO Performance Award had been instrumental in motivating Mr. Musk to lead Tesla’s achievement of the objectives set out in the Original Master Plan, thereby generating significant shareholder value. With the Original Master Plan having been achieved and with the second master plan (“Master Plan, Part Deux”) having been announced, the 2018 CEO Performance Award was designed to help align Tesla and its employees as they designed, engineered and made the products that executed on Master Plan, Part Deux, and focus everyone at Tesla on achieving the market capitalization and operational milestones that, while challenging, the Board believed Tesla could attain under the right conditions. If all of these milestones were achieved, the Board believed that Tesla would have meaningfully achieved its mission of accelerating the world’s transition to sustainable energy and would have become one of the most valuable and successful companies in the world. The Board approved the 2018 CEO Performance Award and convened a special meeting of shareholders (the “2018 Special Meeting”) to obtain shareholder approval of the award. At the 2018 Special Meeting, 73% of all voting shares present in person or by proxy, without counting those owned by Mr. Musk or Mr. Kimbal Musk, voted to approve the 2018 CEO Performance Award.

  33. Tesla’s Current Compensation Conundrum Led the Board to Create the Special Committee

    Tesla’s Current Compensation Conundrum Led the Board to Create the Special Committee As discussed elsewhere in this proxy statement, companies are encouraged to align their compensation practices with shareholders with “pay-for-performance” structures, and Tesla has long had a philosophy and history of being a leader in this domain by tying executive compensation to performance. Our compensation programs reflect our long-term ambitions — and our startup origins — in that such programs consist largely of equity awards. We believe that equity awards are an effective tool for retaining employees long term, as they vest incrementally over a period of time or upon the achievement of specified performance milestones intended to be achieved over the medium and long term. During periods in which our stock price and the underlying value of equity awards increase, their retentive impact is even greater. We believe that the potential for such increases also creates a culture of ownership that promotes holding equity, which in turn aligns the interests of our employees with the long-term interests of our shareholders. In particular, we believe that compensation for the individuals who are responsible for Tesla’s strategic direction and operations should motivate them to achieve sustainable shareholder value and/or tangible milestones rather than simply remaining at Tesla or maintaining the status quo. This motivation is now of paramount importance given that Tesla has reached a critical inflection point as it prepares for a new era of transformative growth, one in which we will ask Mr. Musk to achieve more ambitious goals than ever. The ambition of these goals is outpaced only by the ambition of Mr. Musk’s recently articulated Master Plan, Part IV, which envisions Tesla driving humanity towards Sustainable Abundance. Therefore, while we offer to our general employee population restricted stock units that will retain some value even if the market value of our stock decreases, grants made to executive officers generally have comprised stock option awards, which have zero initial value and accumulate value, if at all, only to the extent that our stock price increases following their grant, through the applicable vesting dates and until such stock options are ultimately exercised and the underlying shares are sold. Recently, we have made use of restricted stock in order to optimize Mr. Musk’s compensation and provide features not available with stock options. As discussed above, the 2025 CEO Interim Award was structured as restricted stock in recognition of the compensation previously earned, but not yet fully delivered to Mr. Musk under the 2018 CEO Performance Award. Accordingly, restricted stock appropriately balanced the Board’s desire to combine immediate voting rights upon issuance (consistent with the rights Mr. Musk would have had at the time under the 2018 CEO Performance Award had the options under that award been timely issued and exercised) with additional restrictions and vesting conditions designed to retain Mr. Musk. This design also aligns with ongoing shareholder feedback that resonates with the Board: shareholders have, over several years, frequently given Tesla feedback that it is important to them that we find a way to retain and incentivize Mr. Musk. Further, the Board believes that the many posts on X, the letters written by shareholders to the Delaware Chancery Court expressing disagreement with the First Tornetta Opinion and, most importantly, the significant support received in the 2024 Ratification vote, clearly demonstrate that shareholders of this Company want this Board to retain Mr. Musk. In addition, the Board further believes that retaining Mr. Musk is in the best interests of Tesla. Following the Second Tornetta Opinion, the Board determined it could no longer wait for Delaware courts to definitively resolve these compensation issues, which are of critical importance to our shareholders, and needed to start a process to do just that.

  34. The Special Committee Determines that Restricted Stock is the Appropriate Vehicle for the 2025 CEO Interim Award

    The Special Committee Determines that Restricted Stock is the Appropriate Vehicle for the 2025 CEO Interim Award The Special Committee ultimately determined that an award of restricted stock was the appropriate vehicle for the 2025 CEO Interim Award even though Tesla has historically used stock options for its CEO performance awards. The Special Committee considered that a restricted stock grant would allow Tesla to immediately deliver the voting influence that Mr. Musk has stated that he desires, while requiring Mr. Musk to remain in a leadership role at Tesla over a two-year vesting period in order to maintain both the voting influence and the economics associated with the 2025 CEO Interim Award. In granting the 2025 CEO Interim Award, the Board ensured that Mr. Musk would be required to forfeit either shares under the 2025 CEO Interim Award or options under the 2018 CEO Performance Award to preclude a windfall should he gain the ability to exercise the 2018 CEO Performance Award. In other words, the 2025 CEO Interim Award is structured so there can be no “double dip.” Based on these and other factors, as further detailed in its Letter to Shareholders, dated August 4, 2025, the Special Committee ultimately determined that retaining and incentivizing Mr. Musk was of paramount importance to Tesla’s future. The 2025 CEO Interim Award required Mr. Musk to pay a purchase price of $23.34 per share, which is equal to the exercise price per share of the 2018 CEO Performance Award. However, the 2025 CEO Interim Award only equates to approximately one-third of the shares that Mr. Musk is entitled to under the 2018 CEO Performance Award. The Special Committee did not intend for the 2025 CEO Interim Award to be a settlement of the 2018 CEO Performance Award. Instead, the Special Committee views the 2025 CEO Interim Award as a good faith payment and the first step in the comprehensive compensation strategy that the Special Committee has developed and is recommending for your approval.

  35. Three-Year Average Equity Award Burn Rate — Excluding 2018 CEO Performance Award and 2025 CEO Interim Award

    Three-Year Average Equity Award Burn Rate — Excluding 2018 CEO Performance Award and 2025 CEO Interim Award

  36. Three-Year Average Equity Award Burn Rate — Excluding 2018 CEO Performance Award and 2025 CEO Interim Award

    | | Weighted Average Shares Outstanding (Undiluted) (thousands) | Options Granted (thousands) | Full-Value Awards Granted (thousands) | Total Options and Full-Value Awards Canceled/ Forfeited (thousands) | Gross Equity Burn Rate(2) | Net Equity Burn Rate(3) | | Year | (a) | (b) | (c) | (d) | (b+c)/(a) | (b+c-d)/(a) | | 2025 (Projected)(1) | 3,271,000 | 14,052 | 7,551 | 10,204 | 0.66% | 0.35% | | 2024 | 3,197,000 | 14,979 | 12,045 | 8,953 | 0.85% | 0.57% | | 2023 | 3,174,000 | 9,521 | 11,743 | 4,341 | 0.67% | 0.53% | | 3-Year Avg. | 3,214,000 | 12,851 | 10,446 | 7,833 | 0.72% | 0.48% |

  37. Three-Year Average Equity Award Burn Rate — Excluding 2018 CEO Performance Award and 2025 CEO Interim Award

    (1) Projection based on 2025 awards through August 19, 2025. The actual 2025 burn rate may differ based on future grants, stock price fluctuations, and cancellations/forfeitures. (2) Defined as the amount in column (b) plus the amount in column (c), divided by the amount in column (a). (3) Defined as the amount in column (b) plus the amount in column (c), minus the amount in column (d), divided by the amount in column (a).

  38. Key Governance Features of the A&R 2019 Equity Incentive Plan

    Key Governance Features of the A&R 2019 Equity Incentive Plan The A&R 2019 Equity Incentive Plan maintains our strong equity plan governance practices from the 2019 Plan, such as the following: • No evergreen feature — The A&R 2019 Equity Incentive Plan provides for a limited number of shares available for the grant of future equity awards, which may be increased only with the approval of shareholders. • No liberal share counting — The A&R 2019 Equity Incentive Plan does not allow shares used to pay the exercise price of an award or to satisfy tax withholding obligations under an award, or shares netted out of the shares issued pursuant to exercised stock appreciation rights, to become available for future grant, and does not allow any shares repurchased by us with the proceeds of the exercise prices for any stock options to be reissued under the A&R 2019 Equity Incentive Plan. In addition, no shares in respect of any Musk Awards may be reissued under the A&R 2019 Equity Incentive Plan. • No exchange programs — The A&R 2019 Equity Incentive Plan does not provide for the administrator to institute an exchange program through a third-party intermediary to exchange outstanding awards for awards with different exercise prices and terms. • Limits on dividends and dividend equivalents — The A&R 2019 Equity Incentive Plan provides that no dividends or dividend equivalents will generally be paid or accrue on awards other than restricted stock, restricted stock units, performance units or performance shares, provided that any stock- or cash-based dividends or dividend equivalents paid on unvested awards will be subject to the same restrictions on transferability and forfeiture as the underlying awards. • Clawback — The A&R 2019 Equity Incentive Plan provides that certain awards will be subject to clawback policies of Tesla, including in our clawback policy required by Nasdaq listing standards as described in “Executive Compensation for Fiscal Year 2024 — Compensation Discussion and Analysis — Clawback Policy,” or similar clawback requirements that arise under applicable laws, which could result in the forfeiture of all or part of such awards. No repricing — The A&R 2019 Equity Incentive Plan prohibits actions that have the purpose or effect of repricing a stock option or stock appreciation right (except as adjusted for certain recapitalizations or approved by shareholders) or any modification of this restriction. No transfers for value — The A&R 2019 Equity Incentive Plan does not allow awards to be transferred for value, and any transfers may be subject to additional terms and conditions determined by the administrator. • No automatic single-trigger acceleration — The A&R 2019 Equity Incentive Plan does not provide for an automatic acceleration of awards upon a change in control unless the acquiring or successor company does not assume or substitute for such awards. The provisions described above apply to equity incentive awards granted to all eligible participants from the General Share Reserve under the A&R 2019 Equity Incentive Plan. In addition, the A&R 2019 Equity Incentive Plan includes the authority to grant Musk Awards from the Special Share Reserve with terms that are unconstrained by the terms of the A&R 2019 Equity Incentive Plan (other than the share reserve and share recycling provisions).

  39. Summary of the A&R 2019 Equity Incentive Plan

    Summary of the A&R 2019 Equity Incentive Plan The material features of the A&R 2019 Equity Incentive Plan are summarized below. The following summary does not purport to be a complete description of all the provisions of the A&R 2019 Equity Incentive Plan. It is qualified in its entirety by reference to the complete text of the A&R 2019 Equity Incentive Plan, as set forth in Annex B.

  40. Background, Purpose and Eligibility under the A&R 2019 Equity Incentive Plan

    Background, Purpose and Eligibility under the A&R 2019 Equity Incentive Plan The A&R 2019 Equity Incentive Plan is intended to attract, retain and incentivize our employees, members of the Board and our eligible consultants to promote the success of Tesla. The A&R 2019 Equity Incentive Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Code, to Tesla’s employees and any of our subsidiary corporations’ employees, and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares, any Musk Awards and any other equity-based or equity-related awards (including unrestricted shares) that the administrator approves (each individually, an “Award”). Our employees, directors and eligible consultants and our subsidiary corporations’ employees and eligible consultants are eligible to receive Awards under the A&R 2019 Equity Incentive Plan. As of August 19, 2025, we had approximately 131,112 employees, including three executive officers, and eight non-employee directors, who were eligible to participate in the 2019 Plan and would have been eligible to participate in the A&R 2019 Equity Incentive Plan if it had been in effect as of that date. As a result, our executive officers and directors have an interest in this proposal because they are eligible to receive awards under the A&R 2019 Equity Incentive Plan.

  41. Plan Administration

    Plan Administration The A&R 2019 Equity Incentive Plan will be administered by the Board, Compensation Committee and one or more additional committees to which the Board, at its discretion or as legally required, may delegate such administration. Different committees may administer the A&R 2019 Equity Incentive Plan with respect to individual recipients (or groups thereof) and individual Awards (or groups thereof). Subject to the provisions of the A&R 2019 Equity Incentive Plan, the administrator has the power to determine the terms of Awards, including the recipients, the exercise price, if any, the number of shares subject to each Award, the fair market value per share of our common stock, the vesting schedule applicable to the Awards, together with any vesting acceleration, and the form of consideration, if any, payable upon exercise of the Award and the terms of the award agreements for use under the A&R 2019 Equity Incentive Plan. The administrator also has the authority, subject to the terms of the A&R 2019 Equity Incentive Plan, to amend existing Awards to reduce or increase their exercise price under certain circumstances (except as described under “— Key Governance Features of the A&R 2019 Equity Incentive Plan — No Repricing,” above), to prescribe rules and to construe and interpret the A&R 2019 Equity Incentive Plan and Awards granted thereunder.

  42. Maximum Shares Reserved for Awards

    Maximum Shares Reserved for Awards The maximum aggregate number of shares that may be issued pursuant to Awards under the A&R 2019 Equity Incentive Plan will be equal to: 1. 2,200,293 shares, which is management’s good-faith estimate of the remaining shares that will be available for grant pursuant to the 2019 Plan at the time of the 2025 Annual Meeting, plus 2. The number of shares subject to stock options or similar awards granted under Tesla’s 2010 Equity Incentive Plan (the “2010 Plan”) that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the 2010 Plan that are forfeited to or repurchased by Tesla due to failure to vest, plus 3. Up to an additional 207,960,630 shares for the Special Share Reserve, plus 4. Up to an additional 60,000,000 shares for the General Share Reserve. Awards may not be granted to Mr. Musk from the 60,000,000 shares being added to the General Share Reserve, including after giving effect to any recycling of shares permitted in accordance with, or any adjustment of awards in connection with certain corporate transactions pursuant to the A&R 2019 Equity Incentive Plan. For clarity, this restriction does not apply to any other shares that are or become available under the General Share Reserve, including without limitation (i) any shares remaining in the General Share Reserve as of the date of the 2025 Annual Meeting (prior to the addition of 60,000,000 new shares to the General Share Reserve) and (ii) any permitted recycling of the shares subject to the 2025 CEO Interim Award in accordance with the A&R 2019 Equity Incentive Plan. For the avoidance of doubt, other than as described in the second item above, no other shares subject to, issued or available for issuance pursuant to awards under the 2010 Plan will be available for issuance under the A&R 2019 Equity Incentive Plan. In addition, no shares in respect of any Musk Awards may be reissued under the A&R 2019 Equity Incentive Plan. No more than an aggregate of 455,460,630 shares may be granted pursuant to incentive stock options under the A&R 2019 Equity Incentive Plan.

  43. Share Counting Rules

    Share Counting Rules The following rules also govern the determination of shares that may be issued pursuant to Awards under the A&R 2019 Equity Incentive Plan: • No shares in respect of any Musk Awards may be reissued under the A&R 2019 Equity Incentive Plan. • In the event of a Tornetta Decision Event that results in forfeiture of, or a reduction in the number of shares subject to, the 2025 CEO Interim Award, the maximum number of shares that may again become available for issuance under the General Share Reserve is 36,000,000. • If an Award from the General Share Reserve under the A&R 2019 Equity Incentive Plan expires or becomes unexercisable or, as applicable, is forfeited to or repurchased by us due to failure to vest, the shares subject to the expired, unexercisable, forfeited or repurchased portion of such Award will become available for future grant under the General Share Reserve of the A&R 2019 Equity Incentive Plan. • Shares that have actually been issued under the A&R 2019 Equity Incentive Plan under any Award (other than an unvested Award of restricted stock) will not be returned to the A&R 2019 Equity Incentive Plan and will not become available for future distribution under the A&R 2019 Equity Incentive Plan. With respect to exercised stock appreciation rights, the total number of shares subject to such stock appreciation rights (and not the net number of shares actually issued pursuant to such stock appreciation rights) will cease to be available under the A&R 2019 Equity Incentive Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will not become available for future grant under the A&R 2019 Equity Incentive Plan. • Shares repurchased by us with the proceeds of the exercise prices for any stock options may not be reissued under the A&R 2019 Equity Incentive Plan. • To the extent an Award from the General Share Reserve under the A&R 2019 Equity Incentive Plan is paid out in cash rather than shares, such cash payment will not reduce the number of shares available for issuance under the General Share Reserve of the A&R 2019 Equity Incentive Plan. • Shares issued in connection with awards that are assumed, converted or substituted pursuant to certain corporate transactions will not reduce the number of shares available for issuance under the General Share Reserve of the A&R 2019 Equity Incentive Plan.

  44. No Repricing

    No Repricing In no event will the administrator reduce the exercise price of a stock option or stock appreciation right, exchange a stock option or stock appreciation right for cash or another Award for the purpose of repricing such stock option or stock appreciation right, exchange a stock option or stock appreciation right for another stock option or stock appreciation right with a lower exercise price, or take any other action with respect to a stock option or stock appreciation right that constitutes a repricing under applicable laws. Moreover, the Board may not amend the A&R 2019 Equity Incentive Plan to modify the foregoing restrictions. However, any adjustment of a stock option or stock appreciation right as provided under “— Adjustments” below or any action taken with the approval of our shareholders will not constitute a prohibited repricing under the A&R 2019 Equity Incentive Plan.

  45. Elon Musk Awards

    Elon Musk Awards The A&R 2019 Equity Incentive Plan permits the grant of Musk Awards from the Special Share Reserve, which are called “Elon Musk Awards” in the A&R 2019 Equity Incentive Plan. Notwithstanding anything in the A&R 2019 Equity Incentive Plan to the contrary, any Musk Awards may be granted to Mr. Musk in such amounts and subject to such terms and conditions as the administrator may determine in its sole discretion subject to its fiduciary duties, unconstrained by the terms of the A&R 2019 Equity Incentive Plan (other than the share counting rules described above, which will apply to any Musk Awards). Musk Awards may be in the form of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or any other types of equity-based, equity-related or equity awards (including the grant or offer for sale of unrestricted shares). Each Musk Award will be administered in accordance with Section 21.418 of the TBOC by disinterested directors (which includes our Compensation Committee). The Board commits to shareholders that no material additional benefit will be provided to Mr. Musk in the form of a Musk Award that was not previously available under the 2018 CEO Performance Award.

  46. Incentive and Nonstatutory Stock Options

    Incentive and Nonstatutory Stock Options Incentive and/or nonstatutory stock options may be granted under the A&R 2019 Equity Incentive Plan; provided that incentive stock options are only granted to employees. The exercise price of incentive and/or nonstatutory stock options must equal at least the fair market value of our common stock on the date of grant, unless determined otherwise by the administrator with respect to the applicable Award (which Award will, for the avoidance of doubt, comply with Section 409A of the Code, to the extent applicable). The term of an option may not exceed ten years; provided, however, that an incentive stock option held by a participant who owns more than 10% of the total combined voting power of all classes of our stock, or of certain of our parent or subsidiary corporations, may not have a term in excess of five years and must have an exercise price of at least 110% of the fair market value of our common stock on the grant date. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, shares or other property acceptable to the plan administrator. Subject to the provisions of the A&R 2019 Equity Incentive Plan, the administrator determines the remaining terms of the options (e.g., vesting). After the termination of service of an employee, director or consultant, the participant may exercise his or her option, to the extent vested as of such date of termination, for the period of time stated in his or her option agreement. Generally, if termination is due to death or disability, the option will remain exercisable for 12 months. In all other cases, the option will generally remain exercisable for three months following the termination of service. However, in no event may an option be exercised later than the expiration of its term. No dividends or dividend equivalent rights will be paid or accrued on stock options under the A&R 2019 Equity Incentive Plan. The specific terms will be set forth in an award agreement.

  47. Restricted Stock

    Restricted Stock Restricted stock may be granted under the A&R 2019 Equity Incentive Plan. Restricted stock awards are grants of shares of our common stock that are subject to various restrictions, including restrictions on transferability, forfeiture provisions and other restrictions as the administrator may deem advisable or appropriate, and other terms and conditions as the administrator, in its sole discretion, determines in accordance with the terms and conditions of the A&R 2019 Equity Incentive Plan. Shares of restricted stock will vest and the restrictions on such shares will lapse, in accordance with terms and conditions established by the administrator. Such terms may include, among other things, vesting upon the achievement of specific performance goals determined by the administrator and/or continued service to us. The administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Recipients of restricted stock awards generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, provided that all dividends, whether paid in shares or cash, will be subject to the same restrictions on transferability and forfeitability as the restricted stock with respect to which they were paid. Shares of restricted stock that do not vest for any reason generally will be forfeited by the recipient. The specific terms will be set forth in an award agreement.

  48. Restricted Stock Units

    Restricted Stock Units Restricted stock units may be granted under the A&R 2019 Equity Incentive Plan. Each restricted stock unit granted is a bookkeeping entry representing an amount equal to the fair market value of one share of our common stock. Subject to the provisions of the A&R 2019 Equity Incentive Plan, the administrator determines the terms and conditions of restricted stock units, including the vesting criteria, which may include achievement of specified performance criteria or continued service to us, and the form and timing of payment. The administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. The administrator determines in its sole discretion whether an award will be settled in stock, cash or a combination of both. Any dividend equivalents on restricted stock units may be earned in shares or cash but will be subject to the same restrictions on transferability and forfeitability as the restricted stock units with respect to which they relate. The specific terms will be set forth in an award agreement.

  49. Performance Units/Performance Shares

    Performance Units/Performance Shares Performance units and performance shares may be granted under the A&R 2019 Equity Incentive Plan. Performance units and performance shares are awards that will result in a payment to a participant only if performance goals established by the administrator are achieved or the awards otherwise vest. The administrator will establish organizational or individual performance goals in its discretion, which, depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants. After the grant of a performance unit or performance share, the administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such performance units or performance shares. Performance units shall have an initial dollar value established by the administrator prior to the grant date. Performance shares shall have an initial value equal to the fair market value of our common stock on the grant date. The administrator, in its sole discretion, may pay earned performance units or performance shares in the form of cash, in shares or in some combination thereof. Any dividend equivalents on performance units or performance shares may be earned in shares or cash but will be subject to the same restrictions on transferability and forfeiture as the performance units or performance shares with respect to which they relate. The specific terms will be set forth in an award agreement.

  50. Certain Transactions or Change in Control

    Certain Transactions or Change in Control The A&R 2019 Equity Incentive Plan provides that, unless otherwise set forth in an award agreement, in the event of a merger, consolidation or similar transaction, each outstanding Award or portion thereof will be treated as the administrator determines, except that if such transaction results in a change in control, as defined under the A&R 2019 Equity Incentive Plan, in which an acquiring or successor corporation or its parent or subsidiary does not assume or substitute an equivalent award for any outstanding Award or portion thereof, then such Award or portion thereof will fully vest, all restrictions on such Award or portion thereof will lapse, all performance goals or other vesting criteria applicable to such Award or portion thereof will be deemed achieved at 100% of target levels and such Award or portion thereof will become fully exercisable, if applicable, for a specified period determined by the administrator, unless provided otherwise under the applicable award agreement. The Award or portion thereof will then terminate upon the expiration of the specified period of time. If Awards granted to an outside director are assumed or substituted and such director’s service is terminated at or following such assumption or substitution, other than pursuant to a voluntary resignation, his or her options and stock appreciation rights, if any, will vest fully and become immediately exercisable, all restrictions on his or her restricted stock and restricted stock units, if any, will lapse, and all performance goals or other vesting requirements for his or her performance shares and units will be deemed achieved at 100% of target levels, and all other terms and conditions met, unless provided otherwise under the applicable award agreements.

  51. Incentive Stock Options

    Incentive Stock Options Subject to the discussion below regarding the timely filing of a Section 83(b) election with respect to the shares received pursuant to the exercise of an incentive stock option, an A&R 2019 Equity Incentive Plan participant who is granted an incentive stock option does not recognize taxable income at the time the option is granted or upon its exercise. Upon a disposition of the shares more than two years after grant of the option and one year after exercise of the option, any gain or loss is treated as long-term capital gain or loss. If these holding periods are not satisfied and a Section 83(b) election has not been timely filed, the participant recognizes ordinary income at the time of disposition equal to the difference between the exercise price and the lower of (i) the fair market value of the shares on the date of the option exercise, or (ii) the sale price of the shares, but only to the extent such difference is positive. Any gain or loss recognized on such a premature disposition of the shares in excess of the amount treated as ordinary income is treated as long-term or short-term capital gain or loss, depending on the holding period. If a participant timely files a Section 83(b) election with respect to the shares received pursuant to the exercise of an incentive stock option, the participant will recognize ordinary income at the time the incentive stock option is exercised in an amount equal to the difference between the exercise price and the fair market value of the shares on the date of the option exercise, but only to the extent such difference is positive.

  52. Nonstatutory Stock Options

    Nonstatutory Stock Options A participant does not recognize any taxable income at the time he or she is granted a nonstatutory stock option. Upon exercise, if the shares received are vested, or if the shares are unvested but the participant timely files a Section 83(b) election, the participant recognizes ordinary income equal to the excess of the fair market value of the shares on the exercise date over the exercise price and any amount paid for the option. If the shares received are unvested and no timely Section 83(b) election is made, no income is recognized at exercise. Instead, the participant recognizes ordinary income when the shares vest in an amount equal to the excess of the fair market value of the shares on the vesting date over the exercise price and any amount paid for the option. Any taxable income recognized in connection with an option exercise by an employee (or the vesting of shares) is subject to tax withholding. Upon a disposition of such shares by the participant, any difference between the sale price and the participant’s tax basis in the shares (generally, the exercise price plus any income recognized upon exercise or vesting, as applicable) is treated as long-term or short-term capital gain or loss, depending on the holding period.

  53. Restricted Stock, Restricted Stock Units, Performance Units and Performance Shares

    Restricted Stock, Restricted Stock Units, Performance Units and Performance Shares A participant will not have taxable income at the time an award of restricted stock is granted unless the participant makes a timely election under Section 83(b) of the Code. If no such election is made, he or she will recognize ordinary income on the date the shares underlying the Award become either (i) freely transferable or (ii) no longer subject to substantial risk of forfeiture (i.e., vested), in an amount equal to the fair market value of the shares on the date the shares vest over any amount paid for the shares. If a participant makes a timely Section 83(b) election, he or she will recognize ordinary income on the date the shares are issued in an amount equal to the fair market value of the shares on the date the shares are issued over any amount paid for the shares.

  54. Reasons for Approval of the A&R 2019 Equity Incentive Plan

    Reasons for Approval of the A&R 2019 Equity Incentive Plan

  55. Replenishing the General Share Reserve Is Critical to Tesla’s Ability to Attract and Retain Employees with Equity-Based Compensation

    Replenishing the General Share Reserve Is Critical to Tesla’s Ability to Attract and Retain Employees with Equity-Based Compensation The 2025 CEO Interim Award was an important first step in retaining Mr. Musk’s vision and leadership while demonstrating Tesla’s commitment to honoring its compensation promises under the 2018 CEO Performance Award. However, because the General Share Reserve was the only practicable vehicle available at the time of the award, the 2025 CEO Interim Award consumed a significant portion of the available shares. As a result, unless the General Share Reserve is replenished, it may be depleted as early as the first quarter of 2026, limiting Tesla’s ability to grant equity awards to its employees. This will in turn impede Tesla’s ability to attract, retain and incentivize employees using the culture of ownership that it has historically used to drive shareholder value. In short, we are asking shareholders to approve the A&R 2019 Equity Incentive Plan so that we can continue to grant equity awards, including to Mr. Musk, as this is a key component of how Tesla attracts, retains and incentivizes its talented workforce — from top to bottom. Additionally, the use of equity pay-for-performance is a hallmark of good governance and more importantly provides for alignment with shareholder interests, the North Star of our actions at Tesla. We currently expect that if shareholders approve the A&R 2019 Equity Incentive Plan, which will add 60,000,000 shares to the General Share Reserve, we will have flexibility to continue to grant equity awards for approximately two years, or until November 2027 based on the burn rate for employee equity awards, excluding the 2025 CEO Interim Award. The Board has determined that, given the complexity and significance of the other compensation-related decisions being put forth for a shareholder vote at the 2025 Annual Meeting, it is in the best interests of Tesla to replenish the General Share Reserve for approximately two more years and come back to shareholders with a request for any further increases at a subsequent shareholder meeting. This will provide Tesla with time to assess the impact of the current talent market, including the AI talent wars, on its equity compensation practices and continue to include you, our shareholders, in future decision-making relating to our compensation strategy. However, the timing and the total number of shares subject to the equity awards that we may actually need to grant in the future will depend on a number of factors, including the market value of our common stock, changes in our competitors’ or industry-wide compensation practices, changes in the number of personnel that we may hire or need to compensate, changes to forfeiture rates, the need to attract, retain and motivate our employees, the extent to which vesting conditions to awards under the A&R 2019 Equity Incentive Plan are satisfied in the future, our acquisition activity and related hiring of new employees, and the mix between equity awards and other forms of compensation that we may elect for our personnel. We cannot predict our future equity grant practices, the future market value of our common stock or other factors with any degree of certainty at this time, and the General Share Reserve under the A&R 2019 Equity Incentive Plan could ultimately last for a shorter or longer period of time. If shareholders approve the A&R 2019 Equity Incentive Plan at the 2025 Annual Meeting, awards outstanding under the 2019 Plan will remain unaffected and will continue to be governed by their existing terms. In that event, new grants of equity awards following the 2025 Annual Meeting will generally be made under the A&R 2019 Equity Incentive Plan. Approval would help ensure Tesla can continue its employee equity program by replenishing the General Share Reserve. If shareholders do not approve the A&R 2019 Equity Incentive Plan at the 2025 Annual Meeting, the 2019 Plan will remain unchanged and we will continue to have the ability to grant new equity awards thereunder following the 2025 Annual Meeting, subject to the limitations of the General Share Reserve under the 2019 Plan without the increases contemplated by this proposal. As discussed above, because the 2025 CEO Interim Award reduced the shares available under the General Share Reserve, our capacity to make further equity awards could be impeded as early as the first quarter of 2026, negatively impacting our ability to attract, retain and incentivize our employees, especially during the ongoing AI talent wars. Additionally, if shareholders do not approve the A&R 2019 Equity Incentive Plan, the Special Share Reserve will not be established, and the Board will not have the ability to grant any Musk Awards. This would significantly limit Tesla’s ability to deliver the remaining previously earned compensation it promised Mr. Musk under the 2018 CEO Performance Award, which would negatively impact both retention and the credibility of forward-looking compensation agreements with our Chief Executive Officer.

  56. Certain Additional Considerations and Risks Associated with Approval of the A&R 2019 Equity Incentive Plan

    Certain Additional Considerations and Risks Associated with Approval of the A&R 2019 Equity Incentive Plan Shareholders should also consider the following considerations and risks associated with approving the A&R 2019 Equity Incentive Plan: A Musk Award may result in a significant accounting charge to Tesla. As discussed in the section titled “— Granting an Immediate Make-whole Award Similar to the 2025 CEO Interim Award” above, if the Board were to grant a Musk Award for the total amount of shares in the Special Share Reserve, it could possibly result in an accounting charge of $56.2 billion based on the closing stock price of $329.31 on August 19, 2025. Conversely, extending Mr. Musk’s wait to be made whole for his services as Chief Executive Officer indefinitely raises risks related to Tesla’s ability to retain Mr. Musk, or any future executive officer. Additionally, the exact amount of an accounting charge may increase if Tesla’s stock price increases, creating further risk and uncertainty surrounding the circumstances of Mr. Musk’s lack of compensation. Consequently, the Board may subsequently determine that incurrence of an accounting charge in connection with the grant of a Musk Award is justified and outweighs the risks associated with the prolonged Delaware litigation. Such a charge would have a material negative impact on Tesla’s financial results and could, by extension, have a material negative impact on Tesla’s stock price and on shareholder value. Replenishing the General Share Reserve may result in dilution to shareholders. Increasing the shares reserved for issuance under the General Share Reserve may lead to dilution of the ownership interests of existing shareholders. If shareholders approve the increase to the General Share Reserve, Tesla will use those shares to make future equity awards to its employees. As those awards are issued, they will put new shares into circulation, diluting the ownership stake of existing shareholders. Dilution can reduce the relative voting power of current shareholders and the market value of shares held by existing investors because the issuance of additional shares will have the effect of spreading Tesla’s economic value across a larger pool of shares. Musk Awards will result in dilution to shareholders. If granted, a Musk Award may consist of up to 207,960,630 shares of Tesla’s common stock available under the A&R 2019 Equity Incentive Plan. Because this would put a material number of new shares into circulation, it could result in dilution of shareholders’ voting power and economic rights and may result in the creation or entrenchment of control positions. If Mr. Musk were to sell a large portion of his shares following any award, even if the award itself were subject to certain holding periods, it may further impact the share price. The 2018 CEO Performance Award, if reinstated, would result in substantially the same amount of dilution as a Musk Award that uses the full Special Share Reserve, after giving effect to the forfeiture provisions of the 2025 CEO Interim Award. As a result, the maximum dilution from any future Musk Awards would parallel, but not exceed, the dilution associated with the 2018 CEO Performance Award. There can be no assurance as to what approach the Board may take in the future when granting Musk Awards. The Board may decide to grant Musk Awards based on a number of considerations, including the uncertainty caused by Tornetta and the need to incentivize Mr. Musk’s commitment to Tesla. As a result, there can be no assurance of the approach the Board will take in the future with respect to any Musk Awards. Once the A&R 2019 Equity Incentive Plan is approved by shareholders, the Board will have discretion over how to structure Mr. Musk’s equity incentive compensation, including whether any Musk Award is necessary or advisable (including the timing of it (if any)), without the need for a further shareholder vote. If the A&R 2019 Equity Incentive Plan is approved, the Board will have full discretion over any Musk Awards and there can be no guarantee as to the form of such an award. If the Board determines to grant a Musk Award above a certain threshold, depending on the circumstances, a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act” ) may be required, adding a layer of regulatory approval to any retentive grant. Any future Musk Awards, if awarded before Tornetta is complete, could negatively impact the outcome of Tornetta. In order to appropriately incentivize Mr. Musk’s future performance and compensate him for past performance, the Board may deem it necessary in its business judgment to make good on Tesla’s 2018 deal with Mr. Musk by granting him Musk Awards before Tornetta reaches its conclusion. Musk Awards may negatively impact the Tornetta appeal given the central role that the 2018 CEO Performance Award plays in that case. This may result in increased legal expenses, delays or adverse judgments that could have a material impact on shareholder value or Tesla’s business outlook. The ability of the Board to grant Musk Awards may be challenged and result in further legal expenses and delays. Even if the shareholders approve the A&R 2019 Equity Incentive Plan and grant the Board discretion over the structuring of any Musk Awards, such an award may still face legal challenges. Though the Special Committee and the Board believe that the A&R 2019 Equity Incentive Plan, including the Board’s ability to grant Musk Awards thereunder, is valid and enforceable, validating these positions through litigation could result in legal expenses and delays that are difficult to estimate, and there is no assurance that we will be proven correct. Board approval of any future Musk Awards will need to comply with Texas law, and there is no assurance that such approval will be obtained. As discussed in the section above titled “Background of Proposals Three and Four and Background and Approval Process of the Special Committee — Texas Law Considerations,” Texas law allows companies to approve an “interested” transaction with a director or officer through various safe harbors that can be used to show that a transaction with a director or officer is not void or voidable. Because Mr. Musk is a director of Tesla, as well as our Chief Executive Officer, any transaction involving his compensation would likely require such an approach. The most likely avenue would be through the approval of disinterested directors of the Board (or a committee of disinterested directors), although other approval mechanisms are available. If disinterested directors of the Board (or a committee of disinterested directors) were to review a proposed transaction, such review would be governed by their fiduciary duties based on the facts that exist at the time, and there can be no assurance that such directors would approve a Musk Award even if the shareholders approve the A&R 2019 Equity Incentive Plan. Even if such an approval were obtained, the review required by such directors could take substantial time or cause a delay in approvals. If Tesla proceeds with such a transaction without obtaining this approval from one of the other approval mechanisms available under Section 21.418 of the TBOC, the transaction could be void or voidable subject to a judicial determination that the transaction was fair to Tesla when authorized, which could involve litigation costs as well as further uncertainty. Any future Musk Awards, even in combination with the 2025 CEO Interim Award, may not be sufficient to retain and incentivize Mr. Musk as Chief Executive Officer.

  57. Certain Additional Considerations and Risks Associated with Approval of the A&R 2019 Equity Incentive Plan

    Any future Musk Awards that, combined with the 2025 CEO Interim Award, give Mr. Musk the full benefit of what he bargained for in 2018 may be insufficient to retain him as our Chief Executive Officer. However, even if the Board succeeds in granting Musk Awards to Mr. Musk , such awards may not be sufficient to retain his services as Chief Executive Officer going forward, as Mr. Musk is an “at-will” employee and also is not party to an employment agreement. The loss of Mr. Musk’s services could have a material impact on shareholder value and Tesla’s business outlook. Even if the A&R 2019 Equity Incentive Plan is approved, there is no assurance that granting Musk Awards will prevent further shareholder votes with respect to Mr. Musk’s past compensation. There can be no guarantee that the Board’s grant of any Musk Awards under the A&R 2019 Equity Incentive Plan would prevent the need for additional shareholder votes with respect to Mr. Musk’s past compensation. Because Tornetta is ongoing, Delaware courts still have jurisdiction over Tesla’s treatment of Mr. Musk’s compensation under the 2018 CEO Performance Award, despite Tesla’s successful redomestication to Texas. Accordingly, there currently can be no assurance that the impact of a future Delaware court decision will not necessitate a future shareholder vote regarding Mr. Musk’s past compensation or attempt to subject Tesla to additional constraints or limitations, which may not align with the interests of shareholders.

  58. Considerations Associated with Not Approving the A&R 2019 Equity Incentive Plan

    Considerations Associated with Not Approving the A&R 2019 Equity Incentive Plan In addition, shareholders should take into account the following considerations associated with not approving the A&R 2019 Equity Incentive Plan, including: Failing to replenish the General Share Reserve will impede Tesla’s ability to make new equity awards to its employees, directors and consultants as early as this year, negatively impacting our capacity to attract, retain and incentivize talent. Failure to increase the General Share Reserve could significantly harm Tesla’s ability to attract, retain and compensate employees, directors and other service providers. Because the shares currently remaining in the General Share Reserve following the 2025 CEO Interim Award will be depleted as early as the first quarter of next year, Tesla would lack sufficient shares to make future equity awards to employees if the General Share Reserve is not replenished. Given that the 2019 Plan is our principal means of issuing new equity-based compensation to employees, directors and consultants, this would significantly impact our ability to attract and retain talent in a competitive marketplace, particularly in key sectors such as AI and robotics. This inability to compete effectively for talent would, in turn, materially and adversely affect our operations and long-term growth prospects. Mr. Musk has yet to receive full compensation under the 2018 CEO Performance Award and may not continue as our Chief Executive Officer. Mr. Musk has not received full compensation under the 2018 CEO Performance Award and may not continue as our Chief Executive Officer. If the A&R 2019 Equity Incentive Plan is not approved, the Board’s ability to resolve the uncertainty surrounding Mr. Musk’s previously earned compensation will be significantly more limited. With no Musk Award granted and Tornetta still pending, Mr. Musk will be unable to access approximately two-thirds of the value of the 2018 CEO Performance Award, which he is entitled to as a result of his leadership of Tesla, during which time the stock price increased by more than 1,000%. If Tesla continues to be unable to fully uphold its end of the deal it struck with Mr. Musk in 2018, Tesla may be unable to retain his services as Chief Executive Officer. The loss of Mr. Musk’s services could have a material impact on shareholder value and Tesla’s business outlook. See also the section titled “Proposal Four — Considerations Associated with Not Approving the 2025 CEO Performance Award” below, which would also apply if the A&R 2019 Equity Incentive Plan were not approved: • “The failure to retain and incentivize Mr. Musk may impact Tesla’s ability to attract, integrate and retain appropriate talent and compete in sectors requiring specialized or in-demand knowledge.” • “Failure to retain and incentivize Mr. Musk may result in stock price volatility and uncertainty.” • “Failure to retain and incentivize Mr. Musk may result in strategic misalignment with Tesla’s growth objectives.” After careful review of all the factors, taken together, including the available alternatives discussed above, the Special Committee determined that it was advisable for the Board to implement the A&R 2019 Equity Incentive Plan, including granting discretion thereunder for the Board to make future Musk Awards, and the Board believes that approval of the A&R 2019 Equity Incentive Plan and grant of Board discretion is in the best interests of Tesla. The Board therefore recommends that shareholders vote FOR the A&R 2019 Equity Incentive Plan.

  59. Required Vote

    | | The Board recommends a vote FOR the Tesla proposal for approval of the A&R 2019 Equity Incentive Plan. |

  60. Background of the 2025 CEO Performance Award

    Background of the 2025 CEO Performance Award The Special Committee designed the 2025 CEO Performance Award with the primary objective of incentivizing and retaining Mr. Musk to lead Tesla through its next phase of transformational growth since the Special Committee believes that Mr. Musk uniquely has the breadth of experience, leadership qualities and expertise to successfully lead Tesla through this next phase of growth. Mr. Musk is independently wealthy and has consistently demonstrated that he is motivated by more than just conventional forms of compensation. Rather, he is driven by bold, high-stakes challenges that allow him to fundamentally reshape industries and society, while maximizing long-term shareholder value. For example, the 2018 CEO Performance Award drove Mr. Musk to grow Tesla’s market capitalization by more than 20x since March 2018, creating hundreds of billions of dollars in shareholder value in the process while also achieving ambitious revenue and Adjusted EBITDA goals. The Special Committee believes that retaining and incentivizing Mr. Musk as Chief Executive Officer at this pivotal moment is essential to Tesla’s successful transition from its role as a leader in the EV and renewable energy industries to growing into a leader in AI, robotics and related services. The 2025 CEO Performance Award is designed to retain and incentivize Mr. Musk by giving him the voting rights associated with the restricted common stock underlying the award as soon as such shares are earned but then requiring that Mr. Musk remains in service to vest in the economic benefits of the earned restricted common stock. First, Mr. Musk has the opportunity to earn the right to vote restricted stock (such shares, when earned, becoming “Earned Shares”) covering up to 12% of the Adjusted Share Count (as defined below) by achieving ambitious milestones. Then, he must also generally remain in service for the remainder of an either 7.5- or 10-year vesting period (depending on when the shares become Earned Shares) in order to vest in the Earned Shares , subject to exceptions for an earlier change in control of Tesla, termination without cause, death or disability. Any vested shares would remain subject to the five-year holding period that begins from when such shares become Earned Shares if such holding period is still in effect at the time of vesting. The vested shares will also be subject to an Offset Amount (as defined below) per share of $334.09 (the fair market value of our common stock at market close on the grant date of September 3, 2025), which will reduce the number of vested shares that Mr. Musk receives under the 2025 CEO Performance Award unless Mr. Musk elects to pay any such Offset Amount in cash. The goals that must be met for all of the shares to become Earned Shares require Mr. Musk to lead a new period of stratospheric growth, achieving operational milestones and driving Tesla’s market capitalization to at least $8.5 trillion by 2035, which is approximately equal to the combined market capitalizations of each of Meta, Microsoft and Alphabet as of the date of this proxy statement. As discussed in the section titled “— Summary of the Proposed 2025 CEO Performance Award — Overview,” below, as well in the section of the Special Committee’s Report titled “Part 4 — Incentivizing Extraordinary Growth Through the 2025 CEO Performance Award,” the Special Committee arrived at a total award of 12% of the outstanding shares of our common stock as of August 29, 2025, plus the 2018 CEO Performance Award, minus the 2025 CEO Interim Award (the “Adjusted Share Count”)(2) following an extended period of analysis and negotiations with Mr. Musk. Unlike the 2018 CEO Performance Award, which was structured as options to purchase common stock, the 2025 CEO Performance Award is structured as restricted stock. The Special Committee determined that an award of restricted common stock could be a better structure to fulfill Mr. Musk’s desire for voting influence, thereby providing enhanced retention when compared with an award of options to purchase common stock. It provides Mr. Musk with the opportunity to earn voting influence while challenging him to meet a series of extraordinary performance milestones, and unlike a traditional option, the award requires him to stay at Tesla through the vesting period if he wants to maintain that influence and unlock the economic rights associated with any Earned Shares. In order to effectuate this structure, Tesla has entered into a voting agreement (the “Voting Agreement”) with Mr. Musk in connection with the 2025 CEO Performance Award, pursuant to which Mr. Musk agreed that, until such time as there are no shares under the 2025 CEO Performance-Based Restricted Stock Agreement (the “2025 Award Agreement”) that are not earned (“Unearned Shares”), his Unearned Shares will vote or provide written consent, proportionately to the votes for or against or written consents for or not provided, as applicable, by all other shares of capital stock of Tesla that are present and entitled to vote at any annual or special meeting (or similar action) of Tesla’s shareholders (specifically including the Earned Shares and all other shares held by Mr. Musk, other than the Unearned Shares). Pursuant to the Voting Agreement, Mr. Musk also granted Tesla’s Corporate Secretary an irrevocable proxy, coupled with an interest, to vote the Unearned Shares on his behalf as outlined in the Voting Agreement. Because restricted stock is votable by the holder as soon as it is issued, the Voting Agreement will ensure that Mr. Musk is unable to dictate how the shares subject to the 2025 CEO Performance Award vote until after the corresponding tranche of the award becomes Earned Shares. This summary is not exhaustive and is qualified in its entirety by reference to the Voting Agreement. A copy of the Voting Agreement is attached to this proxy statement as Annex D and incorporated by reference herein.

  61. Overview

    | Award Terms | Details | | | c. Sustained market capitalization is required for each Market Capitalization Milestone to be met, other than in a change in control situation. Specifically, two prongs must be met to achieve a given Market Capitalization Milestone: 1. A six-calendar-month trailing average market capitalization (based on trading days) (the “Six-Month Market Capitalization”); and 2. A 30-calendar-day trailing average market capitalization (based on trading days) (the “30-Day Market Capitalization”). Operational Milestones a. 12 operational milestones (each an “Operational Milestone” and together, the “Operational Milestones”) relating to specific product (each a “Product Goal” and together, the “Product Goals”) or Adjusted EBITDA goals (each an “Adjusted EBITDA Milestone” and together, the “Adjusted EBITDA Milestones”) of which each Operational Milestone must be paired with one of the Market Capitalization Milestones for the shares underlying the next tranche to become Earned Shares, subject to a change in control.(3) See the section titled “— Key Terms of the Proposed 2025 CEO Performance Award — Product Goals” for definitions applicable to the Product Goals. b. Product Goals 1. 20 Million Tesla Vehicles Delivered 2. 10 Million Active FSD Subscriptions 3. 1 Million Bots Delivered 4. 1 Million Robotaxis in Commercial Operation c. Adjusted EBITDA Milestones 1. $50 Billion of Adjusted EBITDA 2. $80 Billion of Adjusted EBITDA 3. $130 Billion of Adjusted EBITDA 4. $210 Billion of Adjusted EBITDA 5. $300 Billion of Adjusted EBITDA 6. $400 Billion of Adjusted EBITDA 7. $400 Billion of Adjusted EBITDA 8. $400 Billion of Adjusted EBITDA |

  62. Overview

    | Award Terms | Details | | | For purposes of clarity, meeting each of the last three Adjusted EBITDA Milestones requires achieving Adjusted EBITDA of $400,000,000,000 over four consecutive fiscal quarters. As such, Mr. Musk achieves all of the Operational Milestones prior to a change in control only if Tesla earns $400,000,000,000 of Adjusted EBITDA over three non-overlapping periods, each made up of four consecutive quarters. Earned Shares The shares underlying each of the 12 tranches are no longer subject to the restrictions of the Voting Agreement, becoming Earned Shares, only when both a Market Capitalization Milestone and Operational Milestone are met (or a Deemed Achievement (as defined below) occurs) while Mr. Musk remains in Eligible Service (as defined below) and subject, in the case of the 11th and 12th tranches, to satisfying the CEO Succession Framework (as defined below). Each tranche becomes Earned Shares when the Administrator (as defined below) determines, approves and certifies that the requisite conditions have been satisfied provided that Mr. Musk is then providing Eligible Services. Subject to any Deemed Achievement (as defined below), any one of the 12 Operational Milestones can be matched with any one of the 12 Market Capitalization Milestones, and any single Operational Milestone can satisfy the requirements for one tranche to become Earned Shares. A Market Capitalization Milestone and an Operational Milestone that are matched together can be achieved at different points in time and shares will become Earned Shares at the later of the achievement dates for such Market Capitalization Milestone and Operational Milestone. | | Vesting of Earned Shares | The vesting date for each Earned Share varies depending on when the relevant underlying performance milestones are achieved. Generally, shares that become Earned Shares prior to the 5th anniversary of the 2025 CEO Performance Award grant date vest on the 7.5th anniversary of the 2025 CEO Performance Award, provided that Mr. Musk remains in continuous Eligible Service through the 7.5th anniversary (the “7.5 Year Earned Shares”). Generally, shares that become Earned Shares after the 5th anniversary of the 2025 CEO Performance Award grant date vest on the 10th anniversary of the 2025 CEO Performance Award, provided that Mr. Musk remains in continuous Eligible Service through the 10th anniversary (the “10 Year Earned Shares”). Subject to any applicable clawback provisions, policies or other forfeiture terms, once a milestone is achieved, it is forever deemed achieved for determining whether a tranche has resulted in Earned Shares. |

  63. Overview

    | Award Terms | Details | | Holding Period | To further align Mr. Musk’s interests with those of Tesla’s shareholders, Earned Shares must be held beneficially by Mr. Musk (whether personally or through an approved family planning trust) for five years after first becoming Earned Shares (regardless of whether such Earned Shares vest). | | Employment Requirement For Continued Vesting | Vesting eligibility and eligibility to earn shares are contingent upon Mr. Musk continuing to provide services to Tesla as (i) Chief Executive Officer or (ii) an executive officer responsible for Tesla’s product development or operations that has been approved by disinterested directors of the Board (collectively, “Eligible Service” with any termination of such service referred to herein as a “Cessation of Eligible Service”). | | Termination of Employment Without Cause, Death or Disability | Acceleration of vesting for Earned Shares upon termination of employment without cause, death or disability. | | Change in Control of Tesla | Any Earned Shares will vest upon a change in control of Tesla. In the event of a change in control of Tesla, the Administrator will assess whether shares have become Earned Shares solely on the basis of market capitalization, which will equal the product of (a) the total number of outstanding shares immediately prior to the change in control and (b) the greater of (i) the most recent closing price per share immediately prior to change in control and (ii) the per share price (plus the per share value of any other consideration) received by the Tesla’s shareholders in the change in control. Any Unearned Shares that do not become Earned Shares as a result of the change in control are automatically forfeited. The treatment of the 2025 CEO Performance Award upon a change in control is intended to align Mr. Musk’s interests with Tesla’s other shareholders with respect to evaluating potential takeover offers. | | Voting Agreement | Restrictions on Voting: Prior to such shares becoming Earned Shares, they will be subject to the terms of the Voting Agreement. Pursuant to the Voting Agreement, Mr. Musk will have the right to determine the vote of the shares in a given tranche when they become Earned Shares. Irrevocable Proxy: Pursuant to the Voting Agreement, Mr. Musk will provide the Corporate Secretary of Tesla an irrevocable proxy allowing the Unearned Shares to vote or provide written consent proportionately to the votes for or against or written consents for or not provided, as applicable, of all other shares of capital stock of Tesla that are present and entitled to vote at any annual or special meeting (or similar action) of Tesla’s shareholders. | | Payment of Taxes; Limited Pledging | Payment of Taxes: Taxes with respect to taxable gain on the 2025 CEO Performance Award may be paid by Mr. Musk through the sale of vested shares or in cash or by Tesla through net settlement of vested shares, subject to any limitations imposed under the 2025 Award Agreement or by applicable law or Tesla’s policies. Limited Pledging: Solely for the purposes of satisfying the payment of taxes attributable to required tax withholding or any Offset Amount due in respect of the 2025 CEO Performance Award, Mr. Musk may pledge any shares of our common stock he beneficially owns (including, |

  64. Key Terms of the Proposed 2025 CEO Performance Award

    Change in Control of Tesla. Upon a change in control of Tesla, such as a merger with or purchase by another company, any Earned Shares under the 2025 CEO Performance Award will vest. In a change in control, the earning of tranches will be based solely on the Market Capitalization Milestones, with the measurement of Tesla’s market capitalization determined by the product of the total number of outstanding shares of Tesla common stock immediately before the change in control multiplied by the greater of (i) the last closing price of a share of Tesla common stock before the effective time of the change in control and (ii) the per share price (plus the per share value of any other consideration) received by Tesla’s shareholders in the change in control. The treatment of the 2025 CEO Performance Award upon a change in control is designed to align Mr. Musk’s interests with Tesla’s other shareholders with respect to evaluating potential takeover offers. Any Unearned Shares that do not become Earned Shares as a result of the change in control will be automatically forfeited. Offset Amounts. Mr. Musk is required to pay the applicable Offset Amount under the 2025 CEO Performance Award in one of two ways: (i) net share settlement or (ii) in cash (through open sales or otherwise). In a net share settlement, an amount of shares with a fair market value equal to the Offset Amount will be netted against the shares subject to the 2025 CEO Performance Award. A cash payment simply involves paying any Offset Amount in cash. Unless Mr. Musk elects to pay cash for any Offset Amount, the Offset Amount will automatically be paid through net settlement. The Offset Amount applies upon vesting of the Earned Shares. Payment of Taxes and Tax Withholdings. Mr. Musk may elect to satisfy tax withholding obligations relating to the 2025 CEO Performance Award by net share settlement. To the extent that Mr. Musk does not elect net settlement Mr. Musk may satisfy such tax obligations by (i) paying cash or (ii) selling a sufficient number of shares otherwise deliverable under the 2025 CEO Performance Award through such means determined by Tesla in its sole discretion (whether through a broker or otherwise), and Tesla may provide such support in connection with any such sale as the Administrator determines appropriate. Notwithstanding the foregoing, any required minimum tax withholding will be paid to Tesla in cash if arising due to filing of a Section 83(b) election. Section 83(b) Election. Subject to compliance with Mr. Musk’s tax withholding obligations, Mr. Musk may make an election under Code Section 83(b) with respect to all or a portion of the Shares subject to the 2025 CEO Performance Award. Clawback. The 2025 CEO Performance Award also is subject to any current or future Tesla clawback policy applicable to Tesla’s common stock, provided that the policy does not discriminate against Mr. Musk except as required by applicable law. Milestone Adjustments for Acquisitions. In the event that Tesla acquires a business with a purchase price of more than $20 billion, any then-unearned Market Capitalization Milestone will be increased by the purchase price of such acquisition. Similarly, if the target of an acquisition transaction has Adjusted EBITDA (based on cumulative four consecutive quarters prior to the transaction) of more than $2 billion, the then-unachieved Adjusted EBITDA Milestones will be increased by such target’s Adjusted EBITDA. Additionally, in the event that Tesla acquires a business that manufactures any products and/or provides any services that could be credited against meeting one or more of the Product Goals, the Administrator will equitably adjust, in its sole discretion, such Product Goals in order to prevent diminution or enlargement of the related benefits or potential benefits. These features of the 2025 CEO Performance Award are designed to prevent achievement of milestones based on acquisition activity that could be considered material to the achievement of those milestones. Milestone Adjustments for Spin-Offs. In the event that Tesla enters into a transaction constituting a split-up, spin-off or divestiture (each a “Spin-Off”) that has a value of more than $20 billion, any then-unachieved Market Capitalization Milestone will be decreased by the dollar value of such Spin-Off. If the Spin-Off has Adjusted EBITDA (based on cumulative four consecutive quarters prior to the transaction) of more than $2 billion, the then-unearned Adjusted EBITDA Milestones will be decreased by the Adjusted EBITDA applicable to such Spin-Off. In the event that a Spin-Off results in Tesla having diminished capacity to manufacture any products and/or provide any services that could be credited against meeting one or more of the Product Goals, the Administrator will equitably adjust, in its sole discretion, such Product Goals in order to prevent diminution or enlargement of the related benefits or potential benefits. These features of the 2025 CEO Performance Award are designed to prevent the achievement of those milestones from interfering with Spin-Offs that are otherwise in the best interests of Tesla. Approvals for Issuance. The shares of restricted common stock will be issued automatically on the later to occur of the (i) termination or expiration of the applicable waiting period (and any extension thereof) to the issuance of the shares to Mr. Musk under the HSR Act and (ii) approval of the 2025 CEO Performance Award by Tesla’s shareholders.

  65. Other Details Regarding the Proposed 2025 CEO Performance Award

    Other Details Regarding the Proposed 2025 CEO Performance Award Administration. The 2025 CEO Performance Award will be administered by the Board or a committee thereof, in either case, by an action approved by a majority of its disinterested directors voting thereon satisfying applicable laws (the “Administrator”). The Administrator has the power and authority, in good faith and subject to its fiduciary duties, to construe and interpret the 2025 CEO Performance Award and adopt rules for its administration, interpretation and application of its terms. All actions taken, and interpretations and determinations made, by the Administrator in good faith with respect to the 2025 CEO Performance Award will be final and binding on Mr. Musk and any other interested persons. Limited Pledging. Solely for the purpose of satisfying the payment of taxes or the Offset Amount due in respect of the vesting of the 2025 CEO Performance Award, Mr. Musk may pledge any shares of our common stock he beneficially owns (including shares awarded under the 2025 CEO Performance Award, the 2025 CEO Interim Award and the 2018 CEO Performance Award). Non-transferability. The restricted common stock may not be transferred, assigned, pledged or hypothecated prior to vesting in any manner other than by will or the laws of descent or distribution (and in such event, the transferee will become subject to the Voting Agreement). Upon vesting, the shares may remain subject to any then-remaining holding period, subject to certain exceptions discussed above (including for transfers to change the form in which Mr. Musk holds the shares of our restricted common stock, such as through certain family or estate planning trusts, or as permitted by the Administrator, consistent with Tesla’s internal policies). Mr. Musk will have the right to vote Earned Shares once the performance milestones corresponding to those tranches have been met and certified.

  66. Key Characteristics of the 2012 and 2018 CEO Performance Awards That Influenced the 2025 CEO Performance Award

    | Comparison of the 2012, 2018 and 2025 CEO Performance Awards | | | | | | 2012 CEO Performance Award | 2018 CEO Performance Award | 2025 CEO Performance Award | | % Compensation At-Risk | 100% | 100% | 100% | | Market Capitalization at Time of Award | ~$3.2 billion | ~$53.5 billion | ~$1 trillion | | % Shares Allocated per Tranche | 0.5% | 1% | 1%* | | Market Capitalization Increment per Tranche | $4 billion | $50 billion** | $500 billion*** | | Operational Milestones | Strategic Product Development Goals | Adjusted EBITDA and Revenue | Adjusted EBITDA and Strategic Product Development Goals | | Number of Tranches | 10 | 12 | 12 | | Holding Restriction Period | — | 5 Years | 5 Years | | Equity type | Stock options | Stock options | Restricted common stock | | Minimum Total Shareholder Value Created at Final Market Capitalization Milestone | $40 billion | $600 billion | $7.5 trillion |

  67. Key Characteristics of the 2012 and 2018 CEO Performance Awards That Influenced the 2025 CEO Performance Award

    * Under the 2025 CEO Performance Award, voting rights are exercisable at the time of grant, which is a standard feature of restricted stock. This award is structured to restrict Mr. Musk from voting the underlying shares until such time that a tranche becomes Earned Shares. Generally, the shares do not fully vest until 7.5 or 10 years following the grant date, as further described herein. ** Each tranche, other than the first, required an additional $50 billion increase in market capitalization. The first tranche milestone was $100 billion; the last tranche was $650 billion. The first tranche milestone is $2 trillion, and the last tranche milestone is $8.5 trillion. Each tranche, other than the last two, requires an additional $500 billion increase in market capitalization. Each of the last two tranches requires an additional $1 trillion increase in market capitalization. As described in the section of the Special Committee Report titled “Part 4 — Incentivizing Extraordinary Growth Through the 2025 CEO Performance Award,” in designing the 2025 CEO Performance Award, the Special Committee considered the success of the 2012 CEO Performance Award, which served as the foundation for the design of the 2018 CEO Performance Award. The 2012 CEO Performance Award provided Mr. Musk the right to acquire shares of Tesla’s stock only upon achievement of certain market capitalization and operational milestones tied primarily to product development related to the Original Master Plan. The 2012 CEO Performance Award provided a contingent right to acquire up to 5% of Tesla’s shares in 10 tranches, each equal to 0.5% of Tesla’s shares as of the grant date. Each tranche could only be earned if a corresponding operational milestone was met along with a $4 billion increase in market capitalization, provided Mr. Musk remained employed by Tesla as its Chief Executive Officer. At the time the 2012 CEO Performance Award was granted, Tesla’s market capitalization was approximately $3.2 billon. Achieving all of the milestones under the 2012 CEO Performance Award created more than $40 billion of value for the benefit of Tesla’s shareholders (i.e., 10 tranches of $4 billion of market capitalization). The 2018 CEO Performance Award largely followed the same structure as the 2012 CEO Performance Award — it provided for the grant of stock options through tranches that would vest only if market capitalization and operational milestones were met. A primary difference is that Tesla significantly increased the size of the 2018 CEO Performance Award as an incentive for Mr. Musk to achieve milestones that were significantly larger and more difficult to achieve than the 2012 CEO Performance Award, achieving even greater value for Tesla’s shareholders. Instead of tying each tranche to achieving a product-based operational goal that could be met regardless of the revenue or profit earned by Tesla so long as there was a $4 billion increase to Tesla’s market capitalization, to achieve each tranche of the 2018 CEO Performance Award, Tesla required Mr. Musk to achieve both a $50 billion increase in market capitalization — a requirement that was over 12x larger than the 2012 CEO Performance Award — plus a targeted operational goal based on either Adjusted EBITDA or revenue growth. To earn just the first tranche of the 2018 CEO Performance Award, Mr. Musk needed to increase Tesla’s market capitalization as of the grant date by approximately 70%, from approximately $53.5 billion to $100 billion. As noted by the chair of the Compensation Committee, Ira Ehrenpreis, each successive $50 billion tranche required Mr. Musk to effectively increase Tesla’s value by the value of the entirety of General Motors. To fully earn the 2018 CEO Performance Award, Mr. Musk was required to increase Tesla’s market capitalization by almost $600 billion, which was just less than 12x Tesla’s market capitalization on the grant date of the 2018 CEO Performance Award. To incentivize Mr. Musk to achieve these larger goals, the size of each of the twelve tranches of the 2018 CEO Performance Award was doubled from 0.5% for the 2012 CEO Performance Award to 1% of Tesla’s outstanding shares as of the grant date for the 2018 CEO Performance Award.

  68. Reasons for Approval of the 2025 CEO Performance Award

    Reasons for Approval of the 2025 CEO Performance Award The 2025 CEO Performance Award is structured to maximize shareholder value through the use of restricted common stock. The use of restricted common stock for the 2025 CEO Performance Award with limitations on the ability to vote such restricted common stock provides Mr. Musk with the opportunity to earn additional voting influence at Tesla by achieving extraordinary performance milestones and vest in the economic benefits of the restricted stock by remaining in service at Tesla. Mr. Musk will only be compensated for share appreciation under the 2025 CEO Performance Award by requiring offsets of the existing share value as of the date of grant at the time of vesting. Where the restricted stock of the 2025 CEO Performance Award differs from the options of the 2018 CEO Performance Award is that, even if Mr. Musk hits those milestones, he will be required to stay in continuous Eligible Service until the end of the applicable vesting period (7.5 and 10 years, respectively) in order to vest in the economic benefits of such shares of common stock and will be required to otherwise forfeit any unvested shares of restricted common stock. In this way, the new award structure adds a further layer of retention when compared with the option-based structure of the 2018 CEO Performance Award. The 2025 CEO Performance Award is designed to challenge Mr. Musk with the risk of losing the influence, to the extent earned, that he values most while simultaneously delaying economic gain for years after achievement of the performance milestones by adding the requirement of continued service on Mr. Musk. Thus, in essence, Tesla receives the benefits of the performance milestones and extends Mr. Musk’s service beyond them. The milestone-based, goal-focused structure of the 2025 CEO Performance Award, which sequences earning voting power before economic benefits, reflects the Special Committee’s belief, supported by its experience working with Mr. Musk, that he is primarily driven by the mission of accomplishing ambitious goals, rather than monetary compensation.

  69. Traditional Benchmarking Analysis Is Irrelevant Here

    Traditional Benchmarking Analysis Is Irrelevant Here The Special Committee was aware of the size of the compensation packages provided to chief executive officers at Tesla’s peer group companies and public companies with a similar market capitalization, but expressly declined to recommend setting the amount of Mr. Musk’s incentive compensation opportunity by benchmarking to these chief executive officer pay packages (i.e., setting Mr. Musk’s pay to a stated percentile of chief executive officer pay within a selected peer group). This decision was based, in part, on both the success of the 2018 CEO Performance Award, and the Special Committee’s understanding of what motivates Mr. Musk. The Special Committee determined that chief executive officers at other comparably large companies are not being presented with performance goals comparable in scope, degree, or complexity to those being asked of Mr. Musk. Mr. Musk is being asked to transform Tesla and, in so doing, provide transformative technologies to better society as a whole. Accordingly, traditional compensation packages granted to executives at other companies were determined to not be appropriate for designing Mr. Musk’s incentive compensation. No company in the world has similar goals to what is expected under the pay-for-performance structure of the 2025 CEO Performance Award, nor do other companies have compensation plans where pay for their most important executive is entirely contingent on achievement of such daunting and challenging goals. Accordingly, rather than conducting an inapposite benchmarking exercise, the Special Committee looked to a proven framework for incentivizing transformative growth: the 2018 CEO Performance Award. In Lieu of Benchmarking, the Special Committee Assessed the 2018 CEO Performance Award before Using It as the Framework for the 2025 CEO Performance Award As described in the Special Committee Report, the Special Committee determined that as part of its work, it was appropriate to conduct an assessment of the 2018 CEO Performance Award with the benefit of hindsight. The 2018 CEO Performance Award resulted in unprecedented shareholder value creation, and Mr. Musk has acknowledged that he was motivated by its pay-for-performance compensation framework, and before undertaking to structure a performance-conditional pay package for Mr. Musk, the Special Committee felt it was necessary to ensure the framework of the 2018 CEO Performance Award would be appropriate to replicate. To that end, as further detailed in the Special Committee Report, Infinite Equity conducted an analysis of 113 other U.S. public company chief executive officers (each from a company with at least a $50 billion market capitalization at the time of the 2018 Award) and evaluated how those chief executive officers would have fared when measured against the same milestone structure. As detailed in the section of the Special Committee Report titled “Part 4 — Incentivizing Extraordinary Growth Through the 2025 CEO Performance Award — Learning from the 2018 CEO Performance Award” the Special Committee ultimately determined that none of the chief executive officers in its first analysis would have earned more than three award tranches in the same five-year period (beginning in January 2018) during which Mr. Musk achieved all 12 tranches under the 2018 CEO Performance Award, with approximately 79% of the public-company chief executive officers assessed earning no tranches at all. If the performance period under analysis is extended to seven and a half years, then only NVIDIA Corporation’s chief executive officer would have earned all 12 tranches under the 2018 CEO Performance Award with no material changes to the number of tranches other chief executive officers would have earned during the extended assessment period. These results support that the 2018 CEO Performance Award incentivized outstanding performance and value creation for Tesla’s shareholders at a magnitude and in a timeframe that was unmatched by other chief executive officers at the time. The Special Committee, with the assistance of its advisors, separately reviewed how Tesla’s pay-for-performance results ranked against a comparison group of public companies, as measured by market capitalization as of March 1, 2025. Specifically, the Special Committee compared Tesla’s total shareholder return (“TSR”) and compensation actually paid (“CAP”) with other publicly traded companies over the period beginning from January 1, 2018 through December 31, 2022. Tesla ranked highest for both TSR and CAP among this comparative group. This analysis further demonstrates that the 2018 CEO Performance Award served as an effective incentive for Mr. Musk to achieve extraordinary growth for Tesla and outstanding TSR results for its shareholders. As described in the Special Committee Report, the Special Committee concluded that the foregoing analyses support the efficacy of the structure of the 2018 CEO Performance Award as a unique incentive structure that successfully motivated Mr. Musk. In its design of the 2025 CEO Performance Award, the Special Committee has employed a similar structure, composed of challenging, goal-oriented milestones, with the goal of incentivizing Mr. Musk to achieve further transformative growth for Tesla and its shareholders.

  70. Certain Additional Considerations and Risks Associated with Approval of the 2025 CEO Performance Award

    The 2025 CEO Performance Award may result in one or more accounting charges that have a material negative impact on Tesla’s financial results. The maximum fair value of equity awards is determined on the grant date in accordance with applicable rules under ASC Topic 718 and expensed over the service period, net of actual forfeitures. The expense from stock-based compensation associated with the shares subject to each tranche beginning on the date that assignment of the applicable performance goals is determined to be probable and may vary in amount at each quarterly reporting as a result of potential variability of these estimates and other factors throughout the performance period of the award. Both the inputs to the simulation model and to the probability determination are subjective and generally require significant judgment. As a result, if shareholders approve the 2025 CEO Performance Award, the corresponding accounting charges could impact Tesla’s financials as soon as the current fiscal year. The maximum stock-based compensation expense in respect of the 2025 CEO Performance Award that Tesla would ever recognize, assuming the actual achievement of all performance milestones, would be the actual maximum aggregate fair value of the possible range of estimated fair values of approximately $79.10 billion to $87.75 billion. See the section titled “— Accounting and Tax Considerations — Accounting Consequences and Pro Forma Summary Compensation Table” for further details regarding the accounting consequences of the 2025 CEO Performance Award. The 2025 CEO Performance Award may be challenged and result in further legal expenses and delays. Given the litigation surrounding the 2018 CEO Performance Award, there is a risk that the 2025 CEO Performance Award may be challenged in court. While Tesla and its advisors believe that the 2025 CEO Performance Award is valid and enforceable, and that it was duly authorized and approved in good faith by disinterested and informed directors and is not void or voidable, validating these positions through litigation could result in legal expenses and delays that are difficult to estimate. Significant delays could undermine Tesla’s ability to retain Mr. Musk and incentivize him to achieve the performance measures. The 2025 CEO Performance Award could result in dilution to shareholders, in respect of both voting and economics, and impact the price of Tesla’s common stock. If any or all performance milestones specified in the 2025 CEO Performance Award are achieved and any tranches of shares thereunder become Earned Shares, Mr. Musk will receive the right to vote such shares. Similarly, if the vesting requirements specified herein are met, Mr. Musk would hold vested shares of Tesla’s common stock. Given the magnitude of the award necessary to incentivize Mr. Musk’s performance, commensurate with the magnitude of the milestones underlying the 2025 CEO Performance Award, if achieved, this would result in dilution of shareholders’ voting power or economic rights and may result in the creation or entrenchment of voting positions that could meaningfully influence the direction of Tesla. If Mr. Musk were to sell a large portion of his shares, following the required holding periods, it may further impact the share price of Tesla’s common stock. If achieved in full, the 2025 CEO Performance Award would result in Mr. Musk acquiring a significant number of additional shares, thereby increasing his existing voting power and influence over the direction of Tesla’s future growth. Mr. Musk could have substantial influence over the outcome of corporate actions requiring shareholder approval, including the election of directors, the results of any proposals related to our governing documents, any merger, consolidation or sale of all or substantially all of our assets, or any other significant corporate transaction. The 2025 CEO Performance Award may not provide adequate incentives for Mr. Musk to achieve goals that will further the current business goals of Tesla and increase shareholder value. The Special Committee and the Board believe that the 2025 CEO Performance Award aligns Mr. Musk with Tesla’s current business goals. However, there is no guarantee that these incentives will be sufficient to motivate Mr. Musk to achieve Tesla’s business goals, including the new milestones, or deliver any other increase to shareholder value. Accordingly, even if the 2025 CEO Performance Award is approved by the shareholders, there can be no assurance that it will result in Mr. Musk’s achievement of any milestone, Tesla business goals or increase in shareholder value. There are several negotiated features of the 2025 CEO Performance Award that may not achieve the Special Committee’s objectives, and which may create unforeseen or unintended incentives. For example, the 2025 CEO Performance Award may incentivize the deployment of certain strategies to achieve these objectives even if in lieu of other potential corporate opportunities, which could have a negative impact on Tesla’s reputation and long-term financial performance. Because the 2025 CEO Performance Award is closely tied to specific milestones, it may cause the prioritization of achievement of those milestones over other goals that may in the future turn out to be more beneficial or less risky to Tesla. Significant changes in economic or business conditions after the approval of the 2025 CEO Performance Award may undermine this alignment of interests. In addition, while the Operational Milestones are designed to reflect meaningful business accomplishments, some thresholds — such as those linked to sales of a specific product — could theoretically be satisfied using strategies that emphasize volume over other factors that more meaningfully impact shareholder value. For instance, certain Product Goals — such as those linked to achieving certain numbers of Bots or vehicles — could incentivize the use of strategies that emphasize meeting numerical goals over the creation of meaningful shareholder value. A misalignment of Tesla’s goals and the incentives that might be created by the 2025 CEO Performance Award may have a negative impact on Tesla’s reputation and long-term financial performance. The 2025 CEO Performance Award may result in negative public perception, even if baseless or satisfactorily addressed, resulting in negative publicity that damages Tesla’s brand. Tesla’s reputation and brand recognition play an important role in its business operations, including through the trust and confidence of existing or prospective customers. Our reputation and brand are ultimately vulnerable to many factors that can be difficult or impossible to control and costly or impossible to remediate. Adverse public perception of the 2025 CEO Performance Award, even if it is baseless or satisfactorily addressed, may result in negative publicity for Tesla, which could materially and adversely affect our business, results of operations or financial condition. The occurrence of a Covered Event may undermine the objective of the 2025 CEO Performance Award, despite the precautionary measures taken. The objective of the 2025 CEO Performance Award is to retain and incentivize Mr. Musk to achieve all of the milestones. If a Covered Event occurs, then shares under the 2025 CEO Performance Award may become Earned Shares, under certain conditions (such as Market Capitalization Milestones being met), without all Operational Milestones being achieved. Despite the 2025 CEO Performance Award providing an alternative means of earning tranches following the occurrence of a Covered Event, such an event may nonetheless undermine the objective of the 2025 CEO Performance Award if it has a significant negative impact on Tesla’s business.

  71. Certain Additional Considerations and Risks Associated with Approval of the 2025 CEO Performance Award

    In addition, Tesla cannot accurately predict what will or could constitute a Covered Event, as this definition covers a broad range of changes or events, many of which involve probabilities that are remote or otherwise difficult to quantify and that Tesla cannot adequately plan around or avoid. If Mr. Musk elects to use the net settlement feature to satisfy his tax obligations arising in connection with the 2025 CEO Performance Award, he will receive fewer shares of common stock in connection with the award as a result, but Tesla will need to pay an equivalent cash amount over to governmental authorities. Such cash amounts may be substantial. In a net settlement, Tesla withholds from the shares otherwise deliverable to Mr. Musk a number of shares equal to the amount of the tax obligation, and Tesla then uses cash to pay the taxes. While this is a customary method of satisfying tax obligations that arise in connection with equity awards, this is not currently the usual practice at Tesla, where our employees typically sell shares upon vesting of restricted stock units or the exercise of stock options and use the proceeds of those sales to pay cash taxes. In the event Mr. Musk decides to net settle, Tesla will be obligated to pay the taxes in cash. This may require Tesla to raise capital, either through the sale of equity securities or the issuance or incurrence of debt, or Tesla could use cash on hand. The amounts would likely be exceptionally large. There can be no way to predict the amount of such payments. These payments would be due upon the vesting of the awards (i.e., generally, the 7.5-year and 10-year anniversary, or, if earlier, a change in control); however, there can be no guarantee that Tesla will be able to have such amounts available on hand, or that it will be able to raise such funds on favorable terms, or at all. If Mr. Musk files an election under Section 83(b) of the Code with respect to the 2025 CEO Performance Award, the cash payments described in this paragraph would be due upon the issuance of shares in accordance with the award, rather than upon vesting. Mr. Musk may sell a portion of the shares received upon vesting in shares of Tesla common stock, including any awarded under the 2025 CEO Performance Award, to cover taxes. Given the magnitude of such tax obligations, this could result in a significant sale of shares into the market, and given its unprecedented size, there is no way to predict the impact the resolution of this tax obligation will have on the market for Tesla’s common stock. Upon the vesting under the 2025 CEO Performance Award, Mr. Musk could elect to sell a portion of the resulting shares to satisfy the resulting tax obligations. These “sell-to-cover” transactions are common among public companies and are typically executed automatically, rather than at the discretion of the executive. However, due to the unprecedented size of the 2025 CEO Performance Award, any related tax sales could represent one of the largest individual transactions of its kind in U.S. history. While Mr. Musk must conduct such sales through an orderly disposition in coordination with Tesla, the magnitude of the impacts from such sales could result in impacts on the price of Tesla’s common stock, including short-term volatility. Mr. Musk may use shares of Tesla common stock to facilitate the orderly disposition of shares to satisfy Offset Amount and tax obligations through loan financing to avoid market disruption. If Mr. Musk defaults on the obligations under such loan financing or the value of the pledged shares falls below a certain threshold, it may result in a sale or foreclosure of such shares and a decline in Tesla’s stock price. To facilitate the orderly resale of shares to cover any Offset Amount or tax obligations associated with equity-based awards, Mr. Musk may use Tesla shares that he beneficially owns to secure loan financing from a third party. The intent of these accommodations is to avoid the disruptions to the market for Tesla’s common stock associated with large, concentrated sales. These accommodations would apply, without limitation, to shares awarded to Mr. Musk under the 2018 CEO Performance Award, 2025 CEO Interim Award and 2025 CEO Performance Award. The loans are typically secured by a pledge of the shares, and the lenders may have the right to force a sale of the pledged shares in the open market if the borrower defaults on its obligations or if the value of the pledged shares fall below a certain threshold. A forced sale of a significant number of shares of our common stock in the open market, particularly if it occurs rapidly and without sufficient liquidity, could cause a material decline in our stock price. Such financing or forced sales could also create negative market perceptions about Tesla or the confidence of Mr. Musk in our future prospects, which could further depress our stock price. Tesla must pay, in cash, the employer portion of certain employment taxes arising in connection with the 2025 CEO Performance Award, and such cash amounts may be significant. Tesla is responsible for paying the employer portion of certain employment taxes that arise upon the vesting of shares under the 2025 CEO Performance Award. For instance, under current U.S. tax law, Tesla is responsible for payment of a Medicare tax that is imposed on employers at the rate of 1.45% of covered wages, which is not subject to a wage base limit and includes income recognized in connection with the 2025 CEO Performance Award. The actual amount of Tesla’s tax obligation will depend upon the amount of ordinary income that is recognized by Mr. Musk at the time of vesting, which is based on the fair market value of Tesla’s stock on the vesting date. If Mr. Musk files an election under Section 83(b) of the Code with respect to the 2025 CEO Performance Award, the obligations described in this paragraph would arise at the issuance of shares in accordance with the award, rather than upon vesting. There can be no way to predict the amount of Tesla’s responsibility for such employment taxes, but given the number of shares subject to the award and the Market Capitalization Milestones required to earn such shares, such cash amounts may be significant to Tesla.

  72. Considerations Associated with Not Approving the 2025 CEO Performance Award

    Considerations Associated with Not Approving the 2025 CEO Performance Award In addition, shareholders should take into account the following considerations associated with not approving the 2025 CEO Performance Award, including: Mr. Musk may leave Tesla due to its ability to adequately retain and incentivize him, resulting in the loss of his leadership and vision, which may be critical components of Tesla’s success. Failure to approve the 2025 CEO Performance Award could increase the risk of Mr. Musk departing from or significantly reducing his involvement at Tesla. Mr. Musk has previously declined cash salary and bonus compensation, with equity awards serving as the primary vehicle for both compensation and aligning his interests with those of Tesla’s shareholders. Mr. Musk had not received meaningful compensation, prior to the 2025 CEO Interim Award, for his services to Tesla since he achieved the milestones specified in the 2012 CEO Performance Award in 2017—nearly eight years ago. The 2025 CEO Performance Award is designed to fill this gap, retaining and incentivizing Mr. Musk through performance-based equity grants tied to the achievement of ambitious long-term milestones. Without a renewed equity structure tied to future performance, Mr. Musk may leave Tesla due to its inability to compensate him. Given the current inflection point, the loss of Mr. Musk’s leadership and vision could have a significant adverse impact on Tesla’s continued growth and success. Mr. Musk may remain at Tesla but dedicate less time to our leadership due to the lack of proper incentives, resulting in a negative impact on Tesla’s strategic initiatives, internal alignment and raising potential leadership and continuity issues. The 2025 CEO Performance Award is designed to retain and motivate Mr. Musk over the long term, filling an incentive gap that was created in 2022 when Mr. Musk achieved the final tranche of the 2018 CEO Performance Award. Failure to approve the 2025 CEO Performance Award could result in Mr. Musk remaining Chief Executive Officer while dedicating less time or focus to Tesla’s day-to-day operations and long-term initiatives and could raise leadership and continuity issues. Given the outsized role Mr. Musk’s leadership and vision have played in Tesla’s current and previous success, a decline in active engagement could hinder execution of Tesla’s strategic initiatives and affect internal alignment. Tesla’s failure to retain or incentivize Mr. Musk may result in a lack of cohesive strategic alignment that decreases innovation, reduces investor confidence and destroys shareholder value. The 2025 CEO Performance Award is intended not only to retain and incentivize Mr. Musk, but also to tie his efforts to the achievement of defined operational and financial milestones specified therein. Without such a structure in place to align Mr. Musk’s energies and focus with the specified milestones, there is a risk that Tesla may lack a unified, long-term vision. A lack of alignment among Tesla’s key personnel could result in fragmented decision-making or a decline in broader enterprise cohesion, thus impacting Tesla’s ability to execute on our strategies and long-term goals. This may result in decreased innovation, reduced investor confidence and long-term erosion of shareholder value. The failure to retain and incentivize Mr. Musk may impact Tesla’s ability to attract, integrate and retain appropriate talent and compete in sectors requiring specialized or in-demand knowledge. If Tesla fails to retain or adequately incentivize Mr. Musk, we may also lose our ability to attract top talent due to Mr. Musk’s remarkable ability to draw talented and driven individuals to his ventures. To pursue Tesla’s vision for the future, Tesla may need to hire and train qualified personnel continuously and in a proactive manner, as well as to attract and retain employees with professional and specialized product knowledge. However, Tesla faces competition from competitors in fields such as AI and robotics, where talent is especially scarce. Failing to retain Mr. Musk could harm morale, cause additional personnel to depart, introduce operational delays and risks as departing employees are replaced and successors learn Tesla’s business, or disrupt operations and implementation of business strategy, each of which could harm operating results, and in return have a negative impact on the price of Tesla’s common stock. As such, Mr. Musk’s departure may, in turn, negatively impact Tesla’s ability to attract, integrate and retain appropriately qualified personnel. Failure to retain and incentivize Mr. Musk may result in stock price volatility and uncertainty. Mr. Musk’s leadership of and vision for Tesla are closely tied to Tesla’s brand and, by extension, its stock price. Investors, employees, customers and the general public generally view Mr. Musk’s leadership as integral to Tesla’s success. As a result, if Tesla fails to retain and incentivize Mr. Musk, the resulting uncertainty may result in a negative impact on or create volatility in the price of Tesla’s common stock. Furthermore, current employees may believe their equity award offers have limited upside, and Tesla’s competitors may be able to offer more appealing compensation packages, leading to significant attrition. Such attrition could negatively impact Tesla’s stock price and lead to market volatility. Failure to retain and incentivize Mr. Musk may result in strategic misalignment with Tesla’s growth objectives. Tesla’s long-term growth and transformational initiatives, across AI, robotics, autonomous mobility and clean energy, depend critically on Mr. Musk’s vision and continued involvement. The Operational Milestones in the 2025 CEO Performance Award are designed to support key elements of Tesla’s long-term strategic roadmap. As a result, failure to approve the 2025 CEO Performance Award may negatively impact the alignment of Tesla’s overall strategy, slowing our progress and potentially causing us to miss out on new or existing opportunities in emerging technologies, shifting consumer trends or higher-return business models. Additionally, this misalignment may lead to competing or diffuse strategic priorities across leadership. This could diminish cross-functional coordination and lead to delays in key investments and innovation cycles, hindering Tesla’s ability to remain agile to proactively manage shifts and changes in technological and regulatory landscapes. Without appropriate incentive structures aligned with retaining Mr. Musk, Tesla may experience diminished effectiveness in executing strategic initiatives, potentially resulting in missed growth opportunities and negatively affecting Tesla’s long-term competitive position and shareholder value. If the failure to approve the 2025 CEO Performance Award results in Mr. Musk’s departure, his departure may undermine Tesla’s efforts to continue to be recognized as more than a manufacturer of EVs. Tesla has increasingly positioned itself as a multi-dimensional platform at the intersection of AI, robotics, autonomous mobility, and clean energy innovation. Tesla relies on Mr. Musk’s leadership and vision to drive these initiatives, which are central to Tesla’s long-term strategy and differentiated market positioning. Without his continued involvement, Tesla’s ability to achieve these ambitions may be impaired, and investors or analysts may begin to view Tesla through a narrower lens, as an automotive business rather than a technology leader. Such a perceptual shift could impact Tesla’s multiples, strategic flexibility and access to capital, ultimately affecting our ability to pursue transformational growth opportunities. Failure to retain and incentivize Mr. Musk may damage Tesla’s reputation as a leader in tech.

  73. Accounting Consequences and Pro Forma Summary Compensation Table

    Accounting Consequences and Pro Forma Summary Compensation Table We follow ASC Topic 718, Compensation-Stock Compensation for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all stock-based compensation awards made to employees and directors based on the grant date “fair value” of these awards. Pursuant to ASC Topic 718, this calculation cannot be made for the 2025 CEO Performance Award prior to the date on which it is issued to Mr. Musk, which will be the “grant date” for accounting purposes. However, we have calculated for illustrative purposes a preliminary aggregate fair value estimate for this in the table below. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that a grantee is required to render service in exchange for the award. Accordingly, the 2025 CEO Performance Award would result in the recognition of additional stock-based compensation expense over the term of the award as the tranches thereof become probable of vesting, as determined by the Administrator pursuant to ASC Topic 718. For illustrative purposes only, the following table presents information concerning the total compensation for Mr. Musk in 2025 assuming the 2025 CEO Performance Award is approved by our shareholders at the 2025 Annual Meeting and, as of the date hereof, there is no further compensation approved for Mr. Musk in 2025, as the Board does not have the present intent to grant a Musk Award if the A&R 2019 Equity Incentive Plan is approved. Pursuant to ASC Topic 718, equity awards that are subject to the approval of shareholders are not deemed granted, solely for accounting purposes, until such approval is obtained. Therefore, the actual aggregate fair value of such awards cannot be computed for accounting purposes prior to the date of such approval. The preliminary aggregate maximum fair value estimate on the date that the 2025 CEO Performance Award was granted by our Board (September 3, 2025), pursuant to ASC Topic 718, is $87.75 billion. Such value may not be representative of the value that will be reported in the 2025 Summary Compensation Table in our Annual Report on Form 10-K for the year ended December 31, 2025 if the 2025 CEO Performance Award is approved by our shareholders, which values may be greater or lesser than the values provided herein.

  74. Accounting Consequences and Pro Forma Summary Compensation Table

    | Name and Principal Position | Year | Salary (‘000) ($) | Bonus ($) | 2025 CEO Performance Award Preliminary Aggregate Fair Value Estimate (million) ($)(1) | 2025 CEO Interim Award Preliminary Aggregate Fair Value Estimate (million) ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation($) | Total (million) ($) | | Elon Musk, Technoking of Tesla and Chief Executive Officer | 2025 | — | — | 87,750(2)(3)(4)(5) | 26,060(6)(7) | — | — | 113,810 |

  75. Accounting Consequences and Pro Forma Summary Compensation Table

    (1) The preliminary aggregate fair value estimate does not necessarily correspond to the actual value of the 2025 CEO Performance Award or the 2025 CEO Interim Award, if any, to Mr. Musk. As discussed in the section titled “— Potential Voting Interest That Could Be Realized Under the 2025 CEO Performance Award,” with respect to the 2025 CEO Performance Award, it is not possible to provide the actual value that Mr. Musk would receive if any one or more of the tranches were to vest because that calculation depends in significant part on unknowable assumptions as to future dilution. These amounts do not necessarily correspond to the actual value that may be recognized, which depends on, among other things, the market value of our common stock appreciating from the market value on the respective grant dates. The 2025 CEO Performance Award is intended to compensate Mr. Musk over its 10-year term and will become vested as to all shares subject to it only if (i) our market capitalization increases to $8.5 trillion and the 12 Operational Milestones are achieved during such 10-year period (subject to any Deemed Achievement or change in control), (ii) the applicable service requirements for Mr. Musk are met and (iii) the CEO Succession Framework is satisfied. The restricted common stock subject to the award will become vested on the terms and conditions described in the section titled “— Key Terms of the Proposed 2025 CEO Performance Award.” This award was designed to be entirely an incentive for future performance that would take many years to achieve, if at all. Further, each of the requirements underlying the performance milestones was selected to be very difficult to achieve. If any Unearned Shares remain at the end of the 10-year term, they will be forfeited and returned. If any shares become Earned Shares, but the applicable service requirements for vesting are not met, they will also be forfeited and returned. Pursuant to ASC Topic 718, we would recognize stock-based compensation expense in respect of the 2025 CEO Performance Award over the period that is the longer of: (i) the derived service period calculated by the Monte Carlo simulation model, (ii) the estimated performance milestone achievement period(s) of such milestone(s), to the extent that the Administrator periodically determines one or more performance milestones to be probable of achievement (for accounting purposes pursuant to guidelines set forth in ASC Topic 718) and (iii) the relevant 7.5-year or 10-year vesting period under the 2025 Award Agreement. As the probabilities and estimated achievement dates of performance milestones pursuant to ASC Topic 718 have not yet been determined, we cannot currently estimate the amount or schedule of stock-based compensation expense to be recognized in respect of the 2025 CEO Performance Award in the future. However, the maximum stock-based compensation expense in respect of the 2025 CEO Performance Award that Tesla would ever recognize, assuming the actual achievement of all performance milestones, would be the actual maximum aggregate fair value of the possible range of estimated fair values of approximately $79.10 billion to $87.75 billion. The 2025 CEO Performance Award fair values are to be computed on the date that the 2025 CEO Performance Award is issued to Mr. Musk after (i) termination or expiration of the waiting period (and any extension thereof) under the HSR Act and (ii) approval of the 2025 CEO Performance Award by Tesla’s shareholders. (4) The range of preliminary aggregate fair value estimate reflect reductions of approximately $11.60 billion to $3.13 billion due to the five-year post-earning holding period required by the 2025 CEO Performance Award within the Monte Carlo simulation model. (5) In determining the preliminary aggregate fair value estimate of the 2025 CEO Performance Award, we utilized the Monte Carlo simulation model on the date of grant by the Board with the following assumptions:

  76. Accounting Consequences and Pro Forma Summary Compensation Table

    • The “risk-free interest rate” that we use is based on the United States Treasury yield in effect at the time of grant by the Board for zero coupon United States Treasury notes with maturities equal to the 10-year expected term on a continuously compounded basis. • Our “expected volatility” is derived from our implied volatility on publicly traded options of our common stock and the 10-year historical volatility of our common stock over the expected term. Our historical volatility and implied volatility are weighted equally to produce a single volatility factor. • We do not currently issue dividends; therefore, a 0.00% “dividend yield” has been used to simulate the ending value of our stock which may be delivered to Mr. Musk. • The “illiquidity discounts” were developed using the Finnerty Model and weighted for the assumed post-tax net shares upon vesting that will be subject to the five-year post-earning holding period pursuant to the terms of the 2025 CEO Performance Award. • These assumptions may not be representative of the assumptions that would apply at the time the 2025 CEO Performance Award is approved by shareholders, and which would consequently be used in calculating the actual aggregate fair value for purposes of ASC Topic 718. An increase in the assumed values for the expected volatility and risk-free interest rate, and/or the trading price of our common stock (assuming all other assumptions remain constant) will generally result in a higher value than the preliminary aggregate fair value estimate of the 2025 CEO Performance Award reported in this table. A decrease in the assumed values for the expected volatility, expected term and risk-free interest rate, and/or the trading price of our common stock (assuming all other assumptions remain constant) will generally result in a lower value than the preliminary aggregate fair value estimate of the 2025 CEO Performance Award reported in this table. The 2025 CEO Interim Award will vest upon the second anniversary of August 3, 2025, the date of grant, subject to Mr. Musk remaining in continuous service as CEO or as an executive officer responsible for product development or operations (as approved by the Board’s disinterested directors) through such second anniversary. The 2025 CEO Interim Award will be immediately forfeited and returned to Tesla if, prior to vesting, there is a final, non-appealable judgment, order or decision of the Delaware courts with respect to the action captioned Tornetta v. Elon Musk et al., C.A. No. 2018-0408-KSJM (Del. Ch.), or any pending or future appeal, including In re Tesla, Inc. Derivative Litigation, Nos. 10, 2025, 11, 2025 (Del.) that results in Mr. Musk becoming able to exercise in full the 2018 CEO Performance Award. Tesla will account for the 2025 CEO Interim Award as a grant of restricted stock with a performance condition in accordance with ASC Topic 718, which for purposes of the 2025 CEO Interim Award is based upon the probability of certain conditions being met. Restricted stock with a performance condition is accounted for by recognizing compensation expense over the requisite service period, based on the accounting grant-date fair value, but only if and when the vesting of the award becomes probable. For accounting purposes, the accounting grant-date fair value of the 2025 CEO Interim Award was determined on the date that the shares of restricted stock were no longer subject to conditionality, which was August 15, 2025. The accounting grant-date fair value is based upon the prevailing market price of Tesla’s common stock on such date less the price to be paid to acquire the vested stock under the terms of the 2025 CEO Interim Award, adjusted to take into account an illiquidity discount due to the required holding period. The expense, if any, to be recognized is adjusted for changes to the estimated likelihood of vesting based on the performance condition. The preliminary aggregate fair value estimate reflects a reduction of approximately $3.43 billion due to the five-year holding period from the date of grant in the 2025 CEO Interim Award.

  77. Tax Effect for Mr. Musk

    Tax Effect for Mr. Musk Mr. Musk did not have taxable income from the grant of the 2025 CEO Performance Award, nor will he have taxable income from shareholder approval of the 2025 CEO Performance Award, if such approval occurs. If and when any portion of the 2025 CEO Performance Award vests, he will recognize ordinary income in an amount equal to the fair market value (on the date of vesting) of Tesla shares in the award over the amount he pays for the shares. Any taxable income recognized in connection with the vesting of some or all of the 2025 CEO Performance Award will be subject to tax withholding by us. Any additional gain or loss recognized upon any later disposition of the shares will be capital gain or loss.

  78. Solicit support from 67% of shareholders

    Solicit support from 67% of shareholders Of particular concern, Tesla can impose these requirements without a shareholder vote — simply by issuing a notice. This allows management to override SEC rules and long-established shareholder rights without consent. The $1 million ownership threshold would disqualify the vast majority of shareholders from ever submitting a proposal — even on matters involving significant material risk. According to the Federal Reserve, in 2022 the median U.S. household retirement account held just $87,000.(2) A $1 million ownership requirement would force such investors to concentrate 100% of their savings in a single stock — and then coordinate (aggregate) with roughly a dozen other shareholders doing the same. This is neither reasonable nor safe. Such thresholds would exclude both individual and many institutional investors, silencing investor voices to the detriment of Tesla’s entire shareholder base. The right to file a shareholder proposal is foundational — part of the bundle of ownership rights that ensures accountability and transparency between shareholders and their companies. Proposals have alerted boards and investors alike to emerging and material risks, offering intelligence on such things as: • Corporate governance • Board oversight of opioid distributors and manufacturers (1) https://capitol.texas.gov/tlodocs/89R/billtext/pdf/SB01057I.pdf https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Retirement Accounts;demographic:all; population:1;units:median Worker health and safety • Climate risk and water scarcity • Online child safety • Toxic impacts of corporate products A preponderance of these were filed by shareholders with modest holdings — investors who would be entirely excluded under a $1 million threshold. Shareholder proposals have consistently proven to be a low-cost, high-value tool for companies to better understand and manage material risks. As the Supreme Court noted in Citizens United (2010), corporate democracy serves as a vital safeguard for shareholder rights. This proposal maintains that safeguard. THEREFORE, to preserve corporate democracy, to promote informed capital allocation, and to strengthen Tesla’s long-term value, we urge shareholders to vote FOR this proposal. ~ ~ ~ ***

  79. ROBYN DENHOLM

    | Primary Responsibilities Compensation • Overseeing and recommending Tesla’s global compensation philosophy and policies, plans and benefit programs and making related recommendations to the Board, including by considering “say-on-pay” votes of Tesla’s shareholders • Reviewing and approving for Tesla’s executive officers: annual base salary, equity compensation, employment agreements, severance arrangements and change in control arrangements, if applicable, and any other compensation, benefits or arrangements • Administering the compensation of members of the Board and Tesla’s equity compensation plans • Overseeing the administration of Tesla’s compensation recovery (“clawback”) policy • Conducting an annual review and assessment of all compensation paid by Tesla to non-employee directors • Engaging an independent compensation consultant to advise the Committee in connection with the annual review and assessment of compensation of non-employee directors • Recommending, based on such annual review and assessment, the amount and type of compensation payable to non-employee directors Human Capital • Reviewing human capital management practices related to Tesla’s talent generally (including how Tesla recruits, develops and retains talent) Reporting • Preparing the compensation committee report included in Tesla’s annual proxy statement • Overseeing the preparation of annual disclosure regarding non-employee director compensation Independence Each member of the Compensation Committee qualifies as an independent director under the listing standards of Nasdaq and applicable laws. Meetings The Compensation Committee met nine times in 2024. Charter The Compensation Committee has adopted a written charter approved by the Board, which is available on Tesla’s website at: http://ir.tesla.com/corporate. Report The Compensation Committee Report is included in this proxy statement on page 142. |

  80. Prohibition of Equity Award Repricing

    Prohibition of Equity Award Repricing Tesla views equity-based compensation to be a key factor in incentivizing the future performance of our personnel. Consequently, the 2019 Plan provides, and Tesla’s previous 2010 Equity Incentive Plan provided, that stock options and other equity awards issued under these plans that derive their value from the appreciation of the value of Tesla’s stock may not be exchanged for other awards, repurchased for cash or otherwise be made the subject of transactions that have the purpose or effect of repricing such awards. The A&R 2019 Equity Incentive Plan, including the Musk Awards, prohibits repricing. Repricing would not apply to the 2025 CEO Performance Award because it is restricted stock. In addition, applicable Nasdaq rules prohibit any repricing with respect to the 2018 CEO Performance Award.

  81. Compensation Philosophy

    Compensation Philosophy Our mission is to accelerate the world’s transition to sustainable energy. This is a long-term mission, and our compensation programs reflect this — and our startup origins — in that they consist primarily of salary or wages and equity awards. Whereas salary or wages are intended to meet our employees’ near-term liquidity needs, we believe that equity awards are an effective tool for retaining employees long-term, as they vest incrementally over a period of time or upon the achievement of specified performance milestones intended to be achieved over the medium- and long-term. During periods in which our stock price and the underlying value of equity awards increase, their retention impact is even greater. We believe that the potential for such increases also creates an ownership culture that promotes holding equity, which in turn aligns the interests of our employees with the long-term interests of our shareholders. Additionally, this compensation philosophy further allows our employees to grow their skill sets and contributions consistent with our long-term mission. For these reasons, our goal is to provide each employee with the opportunity to participate in our equity programs, with certain cash-based bonus programs serving generally to accommodate specific incentive structures or liquidity needs. In light of these considerations, we generally do not make annual grants of equity awards to our senior executives, including our NEOs, and instead grant equity awards from time to time based upon individual roles and contributions and the retentive impact of currently outstanding equity awards. By combining salary or wages and our equity award program, we strive to offer a total level of compensation that is competitive within specific roles and geographical markets. In particular, we believe that compensation for the individuals who are responsible for Tesla’s strategic direction and operations should motivate them to achieve sustainable shareholder value and/or tangible milestones rather than to simply remain at Tesla or maintain the status quo. Therefore, while we offer to our general employee population restricted stock units that will retain some value even if the market value of our stock decreases, when grants are made to executive officers those grants generally comprise stock option awards, which have zero initial value and accumulate value, if at all, only to the extent that our stock price increases following their grant, through the applicable vesting dates and until such stock options are ultimately exercised and the underlying shares are sold. In addition, because equity awards comprise a greater proportion of our executive officers’ total level of compensation compared to comparable roles at peer companies, a sustained decrease in our stock price or failure to achieve the applicable operational milestones may result in a level of total compensation that is significantly less than that of such peer roles. Likewise, our outside director compensation program has been comprised primarily of equity awards that are entirely in the form of stock option awards, as well as relatively modest cash retainer payments that may be waived at the election of each director. Each director determined to forego all cash retainer payments for 2024. We evaluate our compensation philosophy and programs regularly and evolve them as circumstances merit with oversight by the Compensation Committee, particularly with respect to executive and director compensation. For example, if our stock price experiences significant movement over a short period of time that results in a persistent change to equity compensation, certain adjustments may be considered to align our compensation programs to their intended purposes. In 2024, we reviewed our compensation programs with respect to our senior executives to align our compensation programs to their intended purposes, including striving to offer a total level of compensation that reflects individual performance to be competitive within specific roles and geographical markets and to provide appropriate retentive impact in light of equity awards then outstanding. Following this review, in October 2024, the Compensation Committee, in consultation with its compensation consultant and our Chief Executive Officer, adjusted base salaries and/or granted equity awards to certain senior executives, which included Mr. Taneja, one of our NEOs, whose compensation had not been adjusted since he was promoted to the role of Chief Financial Officer in August 2023, as described below.

  82. Role of Compensation Consultants for 2024 Executive Compensation

    Role of Compensation Consultants for 2024 Executive Compensation The Compensation Committee has the authority to engage, and has from time to time engaged, the services of outside consultants to assist in making decisions regarding the establishment of Tesla’s compensation philosophy and programs, including for executives and directors. In 2024, Compensia, Inc., a national consulting firm (“Compensia”) was retained as a compensation consultant to advise the Compensation Committee with respect to Tesla’s executive compensation program.

  83. 2024 Equity-Based Incentives

    2024 Equity-Based Incentives Our equity award program is the primary vehicle for offering long-term incentives to our NEOs. The equity awards we have historically granted and currently grant are options to purchase shares of our common stock and restricted stock unit awards that are settled in shares of our common stock upon vesting. We have granted to our NEOs both awards that vest over a long-term period and awards that vest only upon the achievement of specified Tesla performance milestones, in each case subject to continued service. We emphasize the grant of stock option awards for our NEOs, which have value only to the extent, if any, that our stock price increases following their grant. Accordingly, since 2020, equity awards granted to our NEOs have primarily been in the form of stock options: Mr. Zhu, our Senior Vice President, received 100% of his equity award as stock options upon his promotion to such role in 2023, and Mr. Taneja, our Chief Financial Officer, received approximately 80% of his equity award as stock options in 2024, following the 2024 review of our compensation programs discussed in “Compensation Philosophy” above and in consideration of his promotion to the role of Chief Financial Officer in August 2023. As a result, a significant portion of our NEOs’ total compensation is entirely at risk, depending on long-term stock price performance. While we strive to offer a total level of compensation that is competitive within specific roles and geographical markets, we do not have a rigid set of criteria for granting equity awards; instead, the Compensation Committee exercises its judgment and discretion, in consultation with our Chief Executive Officer and from time to time, a compensation consultant (other than with respect to decisions pertaining to the Chief Executive Officer’s compensation). To determine the form and amount of equity awards previously granted to NEOs, the Compensation Committee considers, among other things, the role and responsibility of the NEO, competitive market factors, equity awards previously granted to the NEO, the impact of any dramatic changes in our stock price over a short period of time and the cash-based compensation received by the NEO. We generally grant one-time new hire equity awards to our employees, including executives, upon their commencement of employment with us, or upon their promotion to a new position. Additionally, as part of our ongoing executive compensation review and alignment process, we have periodically granted additional equity awards to our executives. The Compensation Committee granted an equity award to Mr. Taneja in October 2024, following the 2024 review of our compensation programs discussed in “Compensation Philosophy” above and considering his promotion in August 2023 to the role of Chief Financial Officer. Approximately 80% of Mr. Taneja’s equity award was granted as stock options and 20% of the award was granted as restricted stock units. See “Executive Compensation for Fiscal Year 2024 — Grants of Plan-Based Awards in 2024” and “Executive Compensation for Fiscal Year 2024 — Outstanding Equity Awards at 2024 Fiscal Year-End” below for a description of the equity awards granted to Mr. Taneja. The Compensation Committee did not grant any equity awards in 2024 to our other NEOs, including our Chief Executive Officer. The Compensation Committee meets periodically, including to approve equity award grants to our executives from time to time. We do not have, nor do we plan to establish, any program, plan or practice to time equity award grants in coordination with releasing material non-public information, and the Compensation Committee does not take material non-public information into account when determining the timing and terms of equity awards. Tesla has not timed the disclosure of material non-public information to affect the value of executive compensation. During 2024, there were no stock options granted to any NEO within four business days preceding, or within one business day after, the filing of any report on Forms 10-K, 10-Q or 8-K that discloses material non-public information.

  84. Severance and Change in Control Benefits

    Severance and Change in Control Benefits No NEO has a severance or change in control arrangement with Tesla.

  85. Bonus

    Bonus We do not currently have or have planned, and historically we have rarely entered into, any specific arrangements with our NEOs providing for cash-based bonus awards.

  86. Non-Equity Incentive Plan Compensation

    Non-Equity Incentive Plan Compensation We did not provide any non-equity incentive plan compensation to any of our NEOs in 2024, and we do not currently have or have planned any specific arrangements with our NEOs providing for non-equity incentive plan compensation.

  87. Historical Equity Compensation

    Historical Equity Compensation Prior to the stock option awards granted in December 2009, Mr. Musk did not receive any equity compensation for his services for a period of five years. In 2010 and 2011, Mr. Musk did not receive any equity grants, because the Compensation Committee believed his grants made in December 2009 already provided sufficient motivation for Mr. Musk to perform his duties as Chief Executive Officer. In August 2012, to create incentives for continued long-term success from the then-recently launched Model S program as well as from Tesla’s then-planned Model X and Model 3 programs, and to further align executive compensation with increases in shareholder value, the Board granted to Mr. Musk the 2012 CEO Performance Award, comprised of a stock option award to purchase 79,123,515 shares (as adjusted for the 2020 Stock Split and 2022 Stock Split) of Tesla’s common stock, representing 5% of Tesla’s total issued and outstanding shares at the time of grant. The 2012 CEO Performance Award consisted of 10 equal vesting tranches, each requiring that Tesla meet a combination of (i) the achievement of a specified operational milestone relating to development of Model X or Model 3, aggregate vehicle production or a gross margin target and (ii) a sustained incremental $4 billion increase in Tesla’s market capitalization from $3.2 billion, Tesla’s market capitalization at the time of grant. Prior to the expiration of the 2012 CEO Performance Award in 2022, the market capitalization conditions for all of the 10 vesting tranches and nine of the 10 operational milestones had been achieved, and nine of 10 tranches had vested. Prior to 2018, the only additional equity awards received by Mr. Musk related to certain immaterial awards granted during 2013 pursuant to a patent incentive program that was available to our employees generally.

  88. Realized Compensation

    Realized Compensation For purposes of the table set forth under the caption “Executive Compensation for Fiscal Year 2024 — 2024 Summary Compensation Table” below, we are required to report pursuant to applicable SEC rules any stock option grants to Mr. Musk at values determined as of their respective grant dates and which are driven by certain assumptions prescribed by Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation — Stock Compensation” (“ASC Topic 718”). Moreover, we are required to report in “Executive Compensation for Fiscal Year 2024 — 2024 Pay Ratio Disclosure” below (i) Mr. Musk’s annual total compensation, (ii) the median of the annual total compensation of all Tesla employees qualifying for this analysis, other than Mr. Musk, in each case calculated pursuant to the methodology used for the table under “Executive Compensation for Fiscal Year 2024 — 2024 Summary Compensation Table” and (iii) the ratio of the former to the latter. In addition, we are required to report in “Executive Compensation for Fiscal Year 2024 — 2024 Option Exercises and Stock Vested” below an amount for the “value realized” upon: (i) any exercise by Mr. Musk of a stock option, which is based on the difference between the market price of the underlying shares at the time of exercise and the exercise price of the stock option and (ii) any vesting of a restricted stock unit award, based on the market price of the award at the time of vesting. Such amount is required to be reported even if Mr. Musk does not actually receive any cash from such exercise or vesting, either because he does not also sell any shares or because he sells only a number of shares sufficient to cover the related tax liabilities resulting from the exercise or vesting. As a result, there may be a significant disconnect between what is reported as compensation for Mr. Musk in a given year in such sections and the value actually realized as compensation in that year or over a period of time. Moreover, the vast majority of compensation in respect of past stock option grants to Mr. Musk, including the 2012 CEO Performance Award and the 2018 CEO Performance Award, were structured to be incentives for future performance with their value realizable only if Tesla’s stock price appreciated compared to the dates of the grants, and if the Company achieved applicable vesting requirements. To supplement the disclosures in “Executive Compensation for Fiscal Year 2024 — 2024 Summary Compensation Table,” “Executive Compensation for Fiscal Year 2024 — 2024 Pay Ratio Disclosure” and “Executive Compensation for Fiscal Year 2024 — 2024 Option Exercises and Stock Vested” below, we have included the following table, which shows the total realized compensation of Mr. Musk for the last three fiscal years, as well as the ratio of Mr. Musk’s realized compensation to the median of the annual total compensation of all other Tesla employees qualifying for this analysis as reported under “Executive Compensation for Fiscal Year 2024 — 2024 Pay Ratio Disclosure.” Realized compensation is not a substitute for reported compensation in evaluating our compensation structure, but we believe that realized compensation is an important factor in understanding that the value of compensation that Mr. Musk ultimately realizes is dependent on a number of additional factors, including: (i) the vesting of certain of his option awards only upon the successful achievement of a number of market capitalization increase and operational milestone targets; (ii) the fact that Mr. Musk does not receive any cash if he does not actually sell shares and thereby reduce his investment in us, and he does not receive any cash to the extent that he sells only shares sufficient to cover income taxes with respect to his awards (including stock options exercised solely to avoid their expiration in accordance with their terms); and (iii) the then-current market value of our common stock at the times at which Mr. Musk may elect to actually sell his shares.

  89. Realized Compensation

    (1) “Total CEO realized compensation” for a given year is defined as (i) the amounts reported for Mr. Musk in “Executive Compensation for Fiscal Year 2024 — 2024 Summary Compensation Table” below under the columns “Salary,” “Bonus,” “Non-Equity Incentive Plan Compensation” and “All Other Compensation,” plus (ii) with respect to any stock option exercised by Mr. Musk in such year in connection with which shares of stock were also sold other than to satisfy any resulting tax liability, the difference between the market price of such shares at the time of exercise and the applicable exercise price of the option, plus (iii) with respect to any restricted stock unit vested by Mr. Musk in such year in connection with which shares of stock were also sold other than automatic sales to satisfy any withholding obligations related to such vesting, the market price of such shares at the time of vesting, plus (iv) any cash actually received by Mr. Musk in respect of any shares sold to cover tax liabilities as described in (ii) and (iii) above, following the payment of such tax liabilities. (2) Reflects the exercise of vested stock options granted as part of a company-wide patent incentive program, and which were scheduled to expire in 2023. Mr. Musk paid the exercise price and applicable taxes in cash, and did not sell any of the resulting shares.

  90. Tax and Accounting Considerations

    Tax and Accounting Considerations Sections 280G and 409A. We have not provided or committed to provide any executive officer or director with a gross-up or other reimbursement for tax amounts the executive might pay pursuant to Section 280G or Section 409A of the Code. Section 280G and related Code sections provide that executive officers, directors who hold significant shareholder interests and certain other service providers could be subject to significant additional excise taxes if they receive payments or benefits in connection with a change in control of Tesla that exceeds certain limits, and that we or our successor could lose a deduction on the amounts subject to the additional tax. Section 409A also imposes additional significant taxes on the individual in the event that an executive officer, director or service provider of certain types receives “deferred compensation” that does not meet the requirements of Section 409A. Tax Deduction Limit. Section 162(m) of the Code generally disallows a tax deduction to public corporations for compensation greater than $1,000,000 paid in any fiscal year to certain executive officers. The Compensation Committee has not adopted a formal policy regarding tax deductibility of compensation paid to our executive officers and reserves the right to pay compensation that may not be deductible to Tesla if it determines that doing so would be in the best interests of Tesla. Accounting Implications. We follow ASC Topic 718 for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all stock-based compensation awards made to employees and directors based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our NEOs may never realize any value from their awards. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that an executive officer is required to render service in exchange for the option or other award.

  91. 2025 CEO Interim Award

    2025 CEO Interim Award On August 3, 2025, the Company approved the 2025 CEO Interim Award – an award of 96 million shares of restricted stock to Mr. Musk – under the 2019 Plan. The shares underlying the 2025 CEO Interim Award were issued upon termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The 2025 CEO Interim Award was recommended by the Special Committee on August 1, 2025, and approved by the Board, with Mr. Musk and Mr. Kimbal Musk recusing, on August 3, 2025. The 2025 CEO Interim Award consists of the following key terms: • Number of Shares: 96 million shares of common stock. • Vesting Schedule: The 2025 CEO Interim Award will vest upon the second anniversary of August 3, 2025, subject to Mr. Musk remaining in continuous service as CEO or as an executive officer responsible for product development or operations (as approved by the Board’s disinterested directors) through such second anniversary. Early Forfeiture: The 2025 CEO Interim Award will be immediately forfeited and returned to the Company if, prior to vesting, there is a final, non-appealable judgment, order or decision of the Delaware Chancery Court with respect to the action captioned Tornetta v. Elon Musk et al., C.A. No. 2018-0408-KSJM (Del. Ch.), or any pending or future appeal, including In re Tesla, Inc. Derivative Litigation, Nos. 10, 2025, 11, 2025 (Del.) (a “Tornetta Decision Event”) that results in Mr. Musk becoming able to exercise in full the 2018 CEO Performance Award. Purchase Price: Mr. Musk must pay the Company $23.34 per share of restricted stock that vests, which is equal to the exercise price per share of the 2018 CEO Performance Award. • Holding Period: Mr. Musk will not sell, transfer or dispose of the shares covered by the 2025 CEO Interim Award until after the fifth anniversary of the grant date, except (i) as required to satisfy taxes due in respect to vesting of the 2025 CEO Interim Award, pay the purchase price or both, (ii) in transactions that involve merely a change of form in which Mr. Musk owns the shares covered by the 2025 CEO Interim Award or (iii) as may be permitted by the disinterested directors of the Board acting as administrator, consistent with the Company’s internal policies (with any sales for the purposes described in (i) and (ii) to be conducted through an orderly disposition in coordination with the Company). • No Double Dip: If there is a Tornetta Decision Event that results in Mr. Musk becoming able to exercise options covered by the 2018 CEO Performance Award, but does not result in Early Forfeiture, then: (i) if the Tornetta Decision Event occurs prior to vesting, shares covered by the 2025 CEO Interim Award will be reduced to the extent that (a) the sum of the 2025 CEO Interim Award shares and any amount of options exercisable under the 2018 CEO Performance Award exceeds (b) the total number of options subject to the 2018 CEO Performance Award in full (the “Excess Amount”); and (ii) if the Tornetta Decision Event occurs after vesting, Mr. Musk will return or otherwise repay the Company for shares issued under the 2025 CEO Interim Award equal to the Excess Amount and the Company will return or otherwise repay the purchase price. Alternatively, rather than returning or repaying as contemplated in clause (ii), Mr. Musk may elect to forfeit the number of options underlying the 2018 CEO Performance Award equal to the Excess Amount. • Limited Pledging: Solely in order to satisfy payment of the purchase price and taxes due in respect of the vesting of the 2025 CEO Interim Award, Mr. Musk may pledge any shares he beneficially owns (including, without limitation, the 2025 CEO Interim Award and the 2018 CEO Performance Award). Additional Vesting Provisions: The 2025 CEO Interim Award will vest on an accelerated basis prior to the second anniversary of the grant date if Mr. Musk is in continued eligible service upon a change in control or his death. Compensation Committee Report The Compensation Committee oversees Tesla’s compensation programs, policies and practices. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy. Respectfully submitted by the members of the Compensation Committee of the Board Ira Ehrenpreis (Chair) Robyn Denholm Kathleen Wilson-Thompson This report of the Compensation Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act. 2024 Summary Compensation Table The following table presents information concerning the total compensation of our NEOs for each of the last three fiscal years. No disclosure is provided for fiscal years for which those persons were not NEOs. The 2025 CEO Interim Award and the 2025 CEO Performance Award were granted to Mr. Musk after the end of the 2024 fiscal year. In accordance with SEC rules, they are not discussed in the following tabular and narrative disclosure. See the sections titled “Proposal Three — Tesla Proposal for Approval of the A&R 2019 Equity Incentive Plan” and “Proposal Four — Tesla Proposal for Approval of the 2025 CEO Performance Award” for more information regarding the proposed A&R 2019 Equity Incentive Plan and 2025 CEO Performance Award.

  92. 2025 CEO Interim Award

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Elon Musk Technoking of Tesla and Chief Executive Officer | 2024 | — | — | — | — | — | — | — | | | 2023 | — | — | — | — | — | — | — | | | 2022 | — | — | — | — | — | — | — | | Vaibhav Taneja Chief Financial Officer | 2024 | 303,846 | — | 26,136,809(3) | 113,029,280(3) | — | 3,000(4) | 139,472,935 | | | 2023 | 275,000 | — | — | — | — | 3,000 | 278,000 | | Tom Zhu SVP, APAC and Global Vehicle Manufacturing | 2024 | 350,000 | — | — | — | — | 168,250(5) | 518,250 | | | 2023 | 381,009 | — | — | 31,641,961 | — | 545,868 | 32,568,838 | | Andrew Baglino Former SVP, Powertrain and Energy Engineering | 2024 | 121,620(6) | — | — | — | — | 3,000(4) | 124,620 | | | 2023 | 300,000 | — | — | — | — | 3,000 | 303,000 | | | 2022 | 300,000 | — | — | — | — | 3,000 | 303,000 |

  93. 2025 CEO Interim Award

    | Year | Summary Compensation Table Total for CEO ($)(1) | Compensation Actually Paid to CEO (in millions) ($)(2) | Average Summary Compensation Table Total for Non-CEO NEOs (in millions) ($)(3) | Average Compensation Actually Paid to Non-CEO NEOs (in millions) ($)(4) | Value of Initial Fixed $100 Investment Based on: | | | | | | | | | | Tesla Total Shareholder Return ($)(5) | Peer Group Total Shareholder Return ($)(6) | Net Income (in millions) ($)(7) | Revenue (in millions) ($)(8) | | 2024 | — | — | 46.7 | 89.3(9) | 1,448 | 285 | 7,153 | 97,690 | | 2023 | — | 1,403 | 8.4 | 45.8(10) | 891 | 209 | 14,974 | 96,773 | | 2022 | — | (9,703) | 0.3 | (165.3) | 442 | 151 | 12,587 | 81,462 | | 2021 | — | 15,016 | 0.3 | (74.3)(11) | 1,263 | 235 | 5,644 | 53,823 | | 2020 | — | 43,019 | 46.6 | 393.0 | 843 | 162 | 862 | 31,536 |

  94. Description of Relationships Between Compensation Actually Paid and Performance

    Description of Relationships Between Compensation Actually Paid and Performance

  95. Relationship Between Compensation Actually Paid to the CEO and Net Income, Revenue and TSR

    Relationship Between Compensation Actually Paid to the CEO and Net Income, Revenue and TSR From 2023 to 2024, compensation actually paid to the CEO decreased by 100.0%. Over this same period, TSR increased by 62.5%, net income decreased by 52.2% and revenue increased by 0.9%. From 2022 to 2023, compensation actually paid to the CEO increased by 114.5%. Over this same period, TSR increased by 101.7%, net income increased by 19.0% and revenue increased by 18.8%. From 2021 to 2022, compensation actually paid to the CEO decreased by 164.6%. Over this same period, TSR decreased by 65.0%, net income increased by 123.0% and revenue increased by 51.4%. From 2020 to 2021, compensation actually paid to the CEO decreased by 65.1%. Over this same period, TSR increased by 49.8%, net income increased by 554.8% and revenue increased by 70.7%. As of the end of the 2024 fiscal year, Mr. Musk does not earn a base salary or receive any equity compensation other than under the 2018 CEO Performance Award. See “Executive Compensation for Fiscal Year 2024 — Compensation Discussion and Analysis — 2024 Chief Executive Officer Compensation” for more information. The vesting of Mr. Musk’s awards were tied to specific market capitalization and operational milestones focusing on total revenue and adjusted EBITDA. However, the compensation actually paid as calculated pursuant to Item 402(v) of Regulation S-K is based on the accounting changes in the fair value of such options, which varies significantly with the performance of our common stock. Thus, because the Company TSR is calculated from the beginning of the earliest year presented, a positive TSR does not necessarily correlate to an increase in compensation actually paid if the increase in TSR is less significant relative to a prior year. In addition, due to the fact that Mr. Musk did not receive any additional equity grants following the 2018 CEO Performance Award, his amount of compensation actually paid decreased because the number of unvested options decreased year over year upon the vesting of tranches of the award. Because the 2018 CEO Performance Award has fully vested, Mr. Musk’s compensation actually paid in 2024 converged to $0. While a positive TSR may not align with an increase in compensation actually paid, as further demonstrated by the following graph, any decreases in TSR would align to decreases in compensation actually paid.

  96. Relationship Between Average Compensation Actually Paid to Non-CEO NEOs and Net Income, Revenue and TSR

    Relationship Between Average Compensation Actually Paid to Non-CEO NEOs and Net Income, Revenue and TSR From 2023 to 2024, compensation actually paid to the other NEOs increased by 95.0%. Over this same period, TSR increased by 62.5%, net income decreased by 52.2% and revenue increased by 0.9%. From 2022 to 2023, compensation actually paid to the other NEOs increased by 127.7%. Over this same period, TSR increased by 101.7%, net income increased by 19.0%, and revenue increased by 18.8%. From 2021 to 2022, compensation actually paid to the other NEOs decreased by 122.5%. Over this same period, TSR decreased by 65.0%, net income increased by 123.0%, and revenue increased by 51.4%. From 2020 to 2021, compensation actually paid to the other NEOs decreased by 118.9%. Over this same period, TSR increased by 49.8%, net income increased by 554.8%, and revenue increased by 70.7%. Though our other NEOs do receive a base salary, a significant portion of their compensation actually paid consists of equity awards. As the compensation actually paid as calculated pursuant to Item 402(v) of Regulation S-K, is based on the accounting changes in the fair value of such options through their vest dates, the value varies significantly with the performance of our common stock. Thus, because the Company TSR is calculated from the beginning of the earliest year presented, a positive overall TSR does not necessarily correlate to an increase in compensation actually paid if the stock price decreased in a given year. From 2020 to 2021, some of the decrease in compensation actually paid to our other NEOs was a result of Jerome Guillen’s departure in June 2021, which led to certain forfeitures of unvested awards. From 2022 to 2023, compensation actually paid to our other NEOs was impacted by Zachary Kirkhorn’s departure in December 2023, which led to certain forfeitures of unvested awards. From 2023 to 2024, the amount of increase in compensation actually paid to other NEOs was affected by Andrew Baglino’s departure in April 2024, which led to certain forfeitures of unvested awards. While a positive TSR may not align with an increase in compensation actually paid, as further demonstrated by the following graph, any decreases in TSR would align with decreases in compensation actually paid.

  97. Grants of Plan-Based Awards in 2024

    Grants of Plan-Based Awards in 2024 The following table presents information concerning each grant of an award made to a NEO in fiscal 2024 under any plan.

  98. Grants of Plan-Based Awards in 2024

    | Name | Grant Date(1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards Threshold Target Maximum | Estimated Future Payouts Under Equity Incentive Plan Awards Threshold Target Maximum | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($/sh) | Closing Market Price (if different) | Grant Date Fair Value/ Incremental Fair value | | Vaibhav Taneja | 10/31/2024(2) | | | | 1,600 | $249.85 | | $192,086 | | | 10/31/2024(2) | | | | 939,887 | $249.85 | | $112,837,194 | | | 10/31/2024(2) | | | 104,610 | | | | $26,136,809 |

  99. Grants of Plan-Based Awards in 2024

    (1) The vesting schedule applicable to each outstanding award is set forth in “Executive Compensation for Fiscal Year 2024 — Outstanding Equity Awards at 2024 Fiscal Year-End” below. Mr. Taneja received approximately 80% of his equity award in the form of stock options and 20% of his equity award in the form of restricted stock units in 2024. The award was granted following the 2024 review of our compensation programs discussed in “Compensation Philosophy” and “Equity-Based Incentives” above. Outstanding Equity Awards at 2024 Fiscal Year-End The following table presents information concerning unexercised options and unvested restricted stock unit awards for each NEO outstanding as of the end of fiscal 2024.

  100. Grants of Plan-Based Awards in 2024

    | | | Option Awards | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Elon Musk | 3/21/2018(2) | 303,960,630 | — | — | 23.34 | 1/19/2028 | — | — | | Vaibhav Taneja | 10/31/2024(3) | 19,614 | 921,873 | — | 249.85 | 10/31/2034 | — | — | | | 10/31/2024(4) | — | — | — | — | — | 98,072 | 39,605,396 | | | 10/19/2020(5) | 154,095 | — | — | 143.61 | 10/19/2030 | — | — | | | 4/19/2019(6) | 764,245 | — | — | 18.22 | 4/19/2029 | — | — | | | 10/16/2018(7) | 10,575 | — | — | 18.44 | 10/16/2028 | — | — | | | 11/13/2017(8) | 13,860 | — | — | 21.03 | 11/13/2027 | — | — | | Tom Zhu | 5/19/2023(9) | 141,275 | 197,785 | — | 180.14 | 5/19/2033 | — | — | | | 10/19/2020(5) | 616,377 | — | — | 143.61 | 10/19/2030 | — | — | | | 7/19/2019(10) | 373,760 | — | — | 17.22 | 7/19/2029 | — | — | | | 4/19/2019(11) | 486,045 | — | — | 18.22 | 4/19/2029 | — | — | | | 10/16/2018(7) | 155,100 | — | — | 18.44 | 10/16/2028 | — | — | | | 8/20/2018(12) | 295,650 | — | — | 20.57 | 8/20/2028 | — | — | | Andrew Baglino(13) | — | — | — | — | — | — | — | — |

  101. Grants of Plan-Based Awards in 2024

    (1) The market value of unvested restricted stock units is calculated by multiplying the number of unvested restricted stock units held by the applicable NEO by the closing price of our common stock on December 31, 2024, which was $403.84. (2) 1/12th of the total number of shares subject to the option becomes vested and exercisable each time: (i) our market capitalization increases initially to $100.0 billion for the first tranche, and by an additional $50.0 billion for each tranche thereafter; and (ii) one of 16 specified operational milestones relating to total revenue or adjusted EBITDA (other than any operating milestone that previously counted towards the vesting of another tranche) is attained, subject to Mr. Musk’s continued service to us as either CEO or as both Executive Chairman and Chief Product Officer, with the CEO reporting to him, at each such vesting event. See “Executive Compensation for Fiscal Year 2024 — Compensation Discussion and Analysis — 2024 Chief Executive Officer Compensation — 2018 CEO Performance Award” above. (3) 1/48th of the aggregate shares subject to the option became vested and exercisable on December 5, 2024, and 1/48th of the shares subject to the option become vested and exercisable each month thereafter, subject to the grantee’s continued service to us on each such vesting date. (4) 1/16th of this award vested on December 5, 2024, and 1/16th this award vests every three months thereafter, subject to the grantee’s continued service to us on each such vesting date. (5) 1/48th of the shares subject to the option became vested and exercisable on December 5, 2020, and 1/48th of the shares subject to the option became vested and exercisable every month thereafter, subject to the grantee’s continued service to us on each such vesting date. (6) 1/8th of the shares subject to the option became vested and exercisable on September 13, 2019, and 1/48th of the shares subject to the option became vested and exercisable each month thereafter, subject to the grantee’s continued service to us on each such vesting date. (7) 1/60th of the shares subject to the option became vested and exercisable on November 1, 2018, and 1/60th of the shares subject to the option became vested and exercisable each month thereafter, subject to the grantee’s continued service to us on each such vesting date. 1/24th of the shares subject to the option vested on November 13, 2017 and 1/48th of the shares subject to the option became vested and exercisable each month thereafter, subject to the grantee’s continued service to us on each such vesting date. 1/48th of the shares subject to the option became vested and exercisable on May 19, 2023, and 1/48th of the shares subject to the option become vested and exercisable each month thereafter, subject to the grantee’s continued service to us on each such vesting date. (10) 1/60th of the shares subject to the option became vested and exercisable on July 24, 2019, and 1/60th of the shares subject to the option became vested and exercisable each month thereafter, subject to the grantee’s continued service to us on each such vesting date. (11) 1/4th of the shares subject to the option each became vested and exercisable upon the Company’s achievement of certain performance objectives set forth in the option agreements, subject to the grantee’s continued service to us on each such vesting date. (12) With respect to 150,000 shares subject to the option, 1/48th of such shares became vested and exercisable upon the Company’s achievement of certain performance objectives set forth in the option agreements, and 1/48th of the shares became vested and exercisable on each monthly anniversary thereafter, and with respect to 225,000 shares subject to the option, 1/60th of such shares became vested and exercisable on August 20, 2018, and 1/60th of the shares became vested and exercisable each month thereafter, subject to the grantee’s continued service to us on each such vesting date. (13) Mr. Baglino departed Tesla in April 2024, which led to certain forfeitures of unvested awards. 2024 Option Exercises and Stock Vested The following table presents information concerning each exercise of stock options and vesting of stock awards during fiscal 2024 for each of the NEOs.

  102. Grants of Plan-Based Awards in 2024

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Vaibhav Taneja | 35,000 | 9,653,338 | 6,538 | 2,415,726 | | Tom Zhu | — | — | 7,899 | 1,542,701 | | Andrew Baglino(3) | 1,162,362 | 98,688,029 | — | — |

  103. Grants of Plan-Based Awards in 2024

    (1) Reflects the product of the number of shares of stock subject to the exercised option multiplied by the difference between the market price of our common stock at the time of exercise on the exercise date and the exercise price of the option. (2) Reflects the product of the number of shares of stock vested multiplied by the market price of our common stock on the vesting date. (3) Includes Mr. Baglino’s exercise, in connection with his departure from Tesla in April 2024, of all of his remaining vested options within the period required by the terms and conditions of the applicable award for post-termination exercise. Potential Payments Upon Termination or Change in Control as of December 31, 2024 In accordance with SEC rules, as of December 31, 2024, we did not have an employment agreement for any specific term with any of our NEOs. Moreover, as of such date we did not have any contract, agreement, plan or arrangement that would result in payments to a NEO at, following, or in connection with any termination of employment, including resignation, severance, retirement or a constructive termination of employment of a NEO, or a change in control of Tesla or a change in the NEO’s responsibilities. 2024 Pay Ratio Disclosure In accordance with SEC rules, we are providing a ratio of (i) Mr. Musk’s 2024 annual total compensation to (ii) the median of the 2024 annual total compensation of all applicable qualifying Tesla employees other than Mr. Musk, in each case calculated pursuant to the disclosure requirements of “Executive Compensation for Fiscal Year 2024 — 2024 Summary Compensation Table” above. As we continue our expansion, the median annual total compensation of our employees reflects differences in local compensation scales and practices. Mr. Musk’s 2024 annual total compensation, as reported under “Executive Compensation for Fiscal Year 2024 — 2024 Summary Compensation Table,” was $0, and the median 2024 annual total compensation of all other qualifying employees, as determined pursuant to the methodology set forth below, was $57,243. Consequently, the applicable ratio of such amounts for 2024 was 0.00:1. Our methodology for identifying the median of the 2024 annual total compensation for each individual other than Mr. Musk was as follows: • We selected December 31, 2024, which is within the last three months of 2024, as the date upon which we would identify the “median employee” because it enabled us to make such identification in a reasonably efficient and economical manner. • We determined that as of December 31, 2024, Tesla and all our subsidiaries had 126,507 individuals qualifying for this analysis (full-time, part-time and temporary employees other than Mr. Musk, subject to the following bullet), of which approximately 43% were based outside of the U.S. and approximately 37% were production line employees. • We did not include in the population of qualifying individuals any employees of staffing agencies whose compensation is determined by such agencies. • We applied the requirements and assumptions required for the table under “Executive Compensation for Fiscal Year 2024 — 2024 Summary Compensation Table” above for each of such individuals to calculate the total annual compensation, including base salary or wages, performance-based commission payments, and equity awards based on their grant date fair values. • We converted any payment earned or paid in a foreign currency to U.S. dollars using the average of the prevailing conversion rates for the month of December 2024. • We selected the median of all total annual compensation amounts calculated in accordance with the foregoing. Compensation of Directors

  104. 2024 Director Compensation Table

    2024 Director Compensation Table The following table provides information concerning the compensation paid by us to each of our non-employee directors who served during any part of fiscal year 2024. Mr. Musk, who is a NEO, does not receive additional compensation for his services as a director. The awards with respect to which values are provided under the column “Option Awards” below are exclusively stock options, which have realizable value only if they vest over time and to the extent, if any, that our stock price exceeds the applicable exercise prices. The values provided below for these awards are based on applicable accounting standards, and do not necessarily reflect the actual amounts realized or realizable pursuant to the underlying stock options.

  105. 2024 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($)(1) | Option Awards ($)(2)(3) | All Other Compensation | Total ($) | | Robyn Denholm | — | — | — | — | | Ira Ehrenpreis | — | — | — | — | | Joe Gebbia | — | — | — | — | | James Murdoch | — | — | — | — | | Kimbal Musk | — | — | — | — | | JB Straubel | — | — | — | — | | Kathleen Wilson-Thompson | — | — | — | — |

  106. 2024 Director Compensation Table

    Reflects cash compensation for service on the Board and/or its applicable committees pursuant to Tesla’s outside director compensation policy (the “Director Compensation Policy”) and/or for service as Chair of the Board as previously approved by the Board, as applicable. The earning and payment of cash retainer payments payable to outside directors may be waived in whole or part at the election of the director. All seven of the outside directors have requested that the Company eliminate the future payment of all of their cash retainer amounts for service on the Board unless the director notified otherwise. As of December 31, 2024, the aggregate number of shares underlying option awards outstanding for each of our non-employee directors with such awards was:

  107. 2024 Director Compensation Table

    | Name | Aggregate Number of Shares Underlying Options Outstanding | | Robyn Denholm(4) | 1,020,220 | | Ira Ehrenpreis(4) | 1,110,000 | | Joe Gebbia | — | | James Murdoch(4) | 1,020,000 | | Kimbal Musk(4) | 326,750 | | JB Straubel | — | | Kathleen Wilson-Thompson(4) | 565,855 |

  108. 2024 Director Compensation Table

    (3) Reflects stock option grants for service on the Board or as members or chairs of Board committees that were automatically granted pursuant to the Director Compensation Policy. In June 2021, the Board unanimously adopted a resolution to forego any automatic grants of annual stock option awards under the Director Compensation Policy or otherwise previously approved by the Board (the “Board Stock Option Grants”) until July 2022 unless the Board earlier acts to amend the Director Compensation Policy or otherwise amends such resolution. In May 2022, the Board agreed to further forego the Board Stock Options Grants until the Board earlier acts to amend the Director Compensation Policy or otherwise amends such resolution. Under the Stipulation and Agreement of Compromise and Settlement (the “Detroit Settlement Agreement”) in connection with a derivative action brought by a purported Tesla shareholder regarding compensation awards granted to Tesla’s directors, other than Mr. Musk, between 2017 and 2020, the Board has permanently foregone the Board Stock Option Grants for 2021 and 2022, and the Board did not receive any compensation for Board service for 2021 and 2022. Ms. Denholm, Mr. Ehrenpreis, Mr. Kimbal Musk, Mr. Murdoch and Ms. Wilson-Thompson have also permanently foregone any compensation for Board service for 2023. See “Other Information” below for additional information regarding the Detroit Settlement Agreement. (4) In connection with the Detroit Settlement Agreement, certain current or former directors agreed to, among other things, return to Tesla certain unexercised options, totaling 1,957,861, that were awarded as compensation from 2017 to 2020 (the “Returned Options”). Tesla implemented certain provisions of the Detroit Settlement Agreement in May 2025 by cancelling the Returned Options. The number of authorized shares under the 2019 Plan was increased by the number of Returned Options. The Returned Options are included in this table.

  109. Non-Employee Director Compensation Arrangements

    Non-Employee Director Compensation Arrangements

  110. A. The Committee’s Purpose and Composition

    A. The Committee’s Purpose and Composition On January 8, 2025, at a meeting of the Board, the Board determined that it was in the best interests of the Company to form the Committee for the purpose of considering, evaluating, and determining whether it would be in the best interests of the Company to retain and incentivize its Chief Executive Officer, Musk, including assessing all alternatives (including no action), and if so, any methods, approaches, or manners (including any new compensation plans or awards) for doing so consistent with applicable legal requirements and other requirements, as further set forth in the Board resolutions delegating authority to the Committee (its “Purpose”). In connection with its Purpose, and as set forth in the Board resolutions delegating authority to the Committee, the Committee was authorized and empowered to (i) prepare such analyses and make such conclusions as the Committee deems appropriate and in the best interests of the Company with respect to its Purpose; (ii) undertake, direct, and oversee such action(s) and make such appropriate determinations as necessary and appropriate to carry out its Purpose, determine a course of action with respect to such Purpose, and recommend such course of action to the Board for approval, and may, from time to time in its discretion, seek additional authority from the Board depending on the circumstances; (iii) engage such independent advisors, including its own independent legal counsel, financial advisors, and other applicable advisors as the Committee shall deem necessary or appropriate to carry out its Purpose; and (iv) contact, obtain information from, consult with, and direct Tesla’s officers and employees (including Tesla’s own advisors (whether legal or otherwise)) as the Committee shall deem necessary or appropriate to carry out its Purpose. While retaining ultimate decision-making power as to whether to accept the Committee’s proposed recommendation, the Board committed not to proceed with respect to the Purpose without the prior favorable recommendation of the Committee. The Board formed the Committee to support the objective that any proposed actions taken with respect to the retention and incentivization of Musk be developed in good faith by informed and disinterested directors, acting in the best interests of the Company. At the January 8, 2025 Board meeting, the Board determined that the Committee would be composed of Wilson-Thompson and Denholm. As addressed in Part 6 below, Wilson-Thompson and Denholm were at all times disinterested directors of the Board while serving on the Committee. Wilson-Thompson joined the Board following the September 29, 2018 settlement with the Securities and Exchange Commission (the “SEC Settlement Agreement”), which, among other things, required Tesla to appoint two additional independent directors.4 Wilson-Thompson was recruited by a prominent executive search firm and had no prior ties to Tesla, Musk, or any other entity associated with Musk or his family. Wilson-Thompson currently serves on Tesla’s Disclosure Controls Committee, Nominating and Corporate Governance Committee, and Compensation Committee. She also served as the sole member of a Special Committee in 2024 that considered the redomestication of Tesla from Delaware to Texas and the ratification of the 2018 CEO Performance Award5, with over 70% of Tesla’s shareholders (excluding Musk and Kimbal Musk) that were represented in person or by proxy at the meeting having voted in favor of both proposals at the 2024 Annual Meeting held on June 13, 2024.6 As described in more detail below, Wilson-Thompson is a sophisticated executive with extensive experience on executive compensation matters, having served on several boards of directors of notable publicly traded companies over the last 15 years. Denholm joined the Board in August 2014 and has been Chairperson of the Board since November 2018. Denholm currently serves on Tesla’s Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Disclosure Controls Committee. As described in more detail below, Denholm has held senior management, leadership, and director roles for several notable publicly traded companies over the last 30 years. 4 Consent Motion for Entry of Final Judgment, SEC v. Tesla, Inc., No. 1:18-cv-08947 (S.D.N.Y. Oct. 16, 2018); Press Release, U.S. Sec. & Exch. Comm’n, Elon Musk Settles SEC Fraud Charges; Tesla Charged with and Resolves Securities Law Charge (Sept. 29, 2018), https://perma.cc/Q2T8-GUF6. 5 The 2018 CEO Performance Award is further discussed in Parts 3 & 4 of this Report. 6 See Current Report on Form 8-K for Tesla, Inc. (June 13, 2024), Item 5.07, available at https://perma.cc/4YHY-7TWS. The vote ratifying the 2018 CEO Performance Award was not given effect by the Delaware Chancery Court. As of the date of this Report, Tesla is currently appealing the Delaware Court of Chancery’s decision to not give effect to this vote before the Delaware Supreme Court.

  111. (4) Calculate Compensation Actually Paid

    (4) Calculate Compensation Actually Paid For each Comparison Group Company, subtract the Grant Date Value of Equity (2)99 from Summary Compensation Table Total (1) and add Value of Vested and Outstanding Equity as of 12/31/2022 (3)

  112. (5) Calculate Percentile Rank of Comparison Group — Compensation Actually Paid

    (5) Calculate Percentile Rank of Comparison Group — Compensation Actually Paid For each Comparison Group Company, calculate the percentile rank of Compensation Actually Paid (4)

  113. (8) Determine the relationship between Compensation Actually Paid Percentile and TSR Percentile

    (8) Determine the relationship between Compensation Actually Paid Percentile and TSR Percentile Graph a scatter plot between Compensation Actually Paid Percentile (x-axis) and Total Shareholder Return Percentile (y-axis) [An example implementing this methodology is presented on the page that follows]

  114. Summary Compensation Table — 2022, 2021, and 2020

    Summary Compensation Table — 2022, 2021, and 2020 The following table, footnotes, and related narrative show information regarding the total compensation of each named executive officer for 2022, 2021, and 2020.

  115. Summary Compensation Table — 2022, 2021, and 2020

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Non-Equity Incentive PIan Compensation(2) ($) | All Other Compensation ($) | Total ($) | | Tim Cook Chief Executive Officer | 2022 | 3,000,000 | — | 82,994,164 | 12,000,000 | 1,425,933(3) | 99,420,097 | | | 2021 | 3,000,000 | — | 82,347,835 | 12,000,000 | 1,386,559 | 98,734,394 | | | 2020 | 3,000,000 | — | — | 10,731,000 | 1,038,259 | 14,769,259 |

  116. Summary Compensation Table — 2019, 2018, and 2017

    Summary Compensation Table — 2019, 2018, and 2017 The following table, footnotes, and related narrative show information regarding the total compensation of each named executive officer for 2019, 2018, and 2017, except in the case of Ms. Adams and Mr. Williams who were not named executive officers in 2017, and Ms. O’Brien who was not a named executive officer in 2018 or 2017. 99 Numbers shown in “( )” refer to the steps in the calculation.

  117. Summary Compensation Table — 2019, 2018, and 2017

    | Name and Principal Position (a) | Year (b) | Salary(1) ($)(c) | Bonus ($)(d) | Stock Awards(2) ($)(e) | Non-Equity Incentive Plan Compensation(3) ($)(f) | All Other Compensation ($)(g) | Total ($)(h) | | Tim Cook Chief Executive Officer | 2019 | 3,000,000 | — | — | 7,671,000 | 884,466(4) | 11,555,466 | | | 2018 | 3,000,000 | — | — | 12,000,000 | 682,219 | 15,682,219 | | | 2017 | 3,057,692 | — | — | 9,327,000 | 440,374 | 12,825,066 |

  118. Summary Compensation Table — 2022, 2021, and 2020

    Summary Compensation Table — 2022, 2021, and 2020 The following table, footnotes, and related narrative show information regarding the total compensation of each named executive officer for 2022, 2021, and 2020.

  119. Summary Compensation Table — 2022, 2021, and 2020

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation ($) | Total ($) | | Tim Cook Chief Executive Officer | 2022 | 3,000,000 | — | 82,994,164 | 12,000,000 | 1,425,933(3) | 99,420,097 | | | 2021 | 3,000,000 | — | 82,347,835 | 12,000,000 | 1,386,559 | 98,734,394 | | | 2020 | 3,000,000 | — | — | 10,731,000 | 1,038,259 | 14,769,259 |

  120. Summary Compensation Table — 2019, 2018, and 2017

    Summary Compensation Table — 2019, 2018, and 2017 The following table, footnotes, and related narrative show information regarding the total compensation of each named executive officer for 2019, 2018, and 2017, except in the case of Ms. Adams and Mr. Williams who were not named executive officers in 2017, and Ms. O’Brien who was not a named executive officer in 2018 or 2017.

  121. Summary Compensation Table — 2019, 2018, and 2017

    | Name and Principal Position (a) | Year (b) | Salary(1) ($)(c) | Bonus ($)(d) | Stock Awards(2) ($)(e) | Non-Equity Incentive PIan Compensation(3) ($)(f) | All Other Compensation ($)(g) | Total ($)(h) | | Tim Cook Chief Executive Officer | 2019 | 3,000,000 | — | — | 7,671,000 | 884,466(4) | 11,555,466 | | | 2018 | 3,000,000 | — | — | 12,000,000 | 682,219 | 15,682,219 | | | 2017 | 3,057,692 | — | — | 9,327,000 | 440,374 | 12,825,066 |

  122. (4) Calculate Compensation Actually Paid

    (4) Calculate Compensation Actually Paid (1) – (2) + (3) = $240,161,435 – $165,341,999 + $242,079,515 = $316,898,951

  123. (5) Calculate Percentile Rank of Comparison Group — Compensation Actually Paid

    (5) Calculate Percentile Rank of Comparison Group — Compensation Actually Paid

  124. (5) Calculate Percentile Rank of Comparison Group — Compensation Actually Paid

    | Company | Summary Compensation Table Total FY2018 – 2022 (a) | Grant Date Value of Equity FY2018 – 2022 (b) | Value of Vested and Outstanding Equity as of 12/31/22 (c) | Compensation Actually Paid FY2018 – 2022 (d) = (a) – (b) + (c) | Percentile Rank of Peers | | GOOGL | $522,235,909 | $494,649,756 | $729,075,383 | $756,661,536 | 80.00% | | AAPL | $240,161,435 | $165,341,999 | $242,079,515 | $316,898,951 | 50.00% | | MSFT | $217,879,856 | $152,500,057 | $365,043,096 | $430,422,895 | 60.00% | | AVGO | $132,416,275 | $107,970,256 | $1,347,368,888 | $1,371,814,907 | 90.00% | | AMZN | $219,045,412 | $211,933,520 | $102,480,000 | $109,591,892 | 10.00% | | WMT | $116,759,890 | $82,017,622 | $173,212,707 | $207,954,975 | 30.00% | | NVDA | $81,182,712 | $65,016,114 | $546,989,857 | $563,156,455 | 70.00% | | JPM | $213,349,372 | $178,120,000 | $270,083,054 | $305,312,426 | 40.00% | | META | $125,192,260 | $0 | $0 | $125,192,260 | 20.00% | | BRK.A | $1,918,862 | $0 | $0 | $1,918,862 | 0.00% | | TSLA | $2,284,068,644 | $2,283,988,504 | $51,846,243,496 | $51,846,323,636 | 100.00% |

  125. (8) Determine the relationship between Compensation Actually Paid Percentile and Total Shareholder Return Percentile

    (8) Determine the relationship between Compensation Actually Paid Percentile and Total Shareholder Return Percentile