Investor's Corner
Tesla under scrutiny by the SEC for failing to disclose fatal crash
Last week’s full blown spat between renown publication Fortune and Tesla CEO Elon Musk, who hotly denied that the information about the death of Model S owner Joshua Brown on May 7 was in any way material to the company’s $2 billion stock sale, has reportedly prompted the SEC to investigate.
A person familiar with the matter says the inquiry is in a very early stage and may not lead to any enforcement action by regulators. “Tesla has not received any communication from the SEC regarding this issue,” a Tesla spokeswoman said. “Our blog post last week provided the relevant information about this issue.”
“The damage sustained by the Model S in the crash limited Tesla’s ability to recover data from it remotely,” a company spokesman said according to a report published by the Wall Street Journal. “During the last week of May, Tesla was able to finish its review of the logs and complete its investigation. The financing round had already taken place by that time.”
Tesla has said in previous securities filings that a successful liability claim associated with its technology, including the Autopilot feature, could harm the company’s financial condition. In its most recent quarterly report, the company said such a claim “could generate substantial negative publicity about our products and business and would have material adverse effect on our brand, business, prospects and operating results.” Tesla says the report contained “boilerplate language” that was “stating the obvious” and “had no bearing” on the fatal crash that took the life of Brown.
Experts in securities law say there is no clearly defined standard for whether the May 7 accident was “material” enough to require disclosure by the company. Adam Pritchard, a law professor at the University of Michigan and former SEC attorney, said he is “very skeptical” a court would find Tesla’s failure to disclose information about the fatal crash to be a breach of the law. He agreed with Musk that the fact Tesla’s stock price regained its value later the same day is “fairly persuasive evidence that it was not material.” He added, “This is development stage technology. There are going to be wrinkles along the way.”
Erik Gerding, a law professor at the University of Colorado in Boulder, said he believes the disclosure issue presented a “tough judgment call” for Tesla executives. “The conservative approach is just to disclose it,” he said, adding that the information could be material if it engenders skepticism about Tesla cars.
The Wall Street Journal indicates that vehicle manufacturers usually don’t disclose traffic fatalities involving their products to investors. With over 35,000 deaths in motor vehicle accidents in America every year, that would amount to over 100 disclosures a day. The difference, of course, is that this matter involves Tesla Motors and new technology. The WSJ says, “Investors have flocked to Tesla shares in part amid conviction the company is on the technological cutting edge and poised to leap ahead of more traditional auto makers.”
Even if that is true, no one has ever suggested that Autopilot would eliminate fatalities completely. Any investor who buys shares in Tesla thinking no deaths or injuries will ever occur is foolish. The fact that the SEC has begun an investigation is news, but the likelihood that any violation of securities law will be found is remote.
The unfortunate accident in which Brown was killed was the first death while Autopilot was in use and it will not be the last. Should Tesla notify the investment community every time a person is injured or killed in a Tesla automobile? The suggestion seems absurd on its face.
Tesla investors are ditching Charles Schwab as their brokerage after the firm said earlier this week that it would vote against CEO Elon Musk’s new compensation package.
Several high-profile Tesla influencers are speaking out against Charles Schwab, saying its decision to vote against the plan that would retain Musk as CEO and give him potentially more voting power if he can achieve the tranches set by the company’s Board of Directors.
The Tesla community recognized that Schwab is one firm that tends to vote against Musk’s compensation plans, as they also voted against the CEO’s 2018 pay package, which was passed by shareholders but then denied by a Delaware Chancery Court.
Schwab’s move was recognized by investors within the Tesla community and now they are speaking out about it:
Hey @CharlesSchwab – I need to speak with someone from Schwab Private Wealth Services this week. Please reach out via email, the mobile app message center, phone, or X DM.
Here’s why this is urgent: At least 6 of your ETF funds (around 7 million $TSLA shares) voted against… https://t.co/uSgPWnfTFc
— Jason DeBolt ⚡️ (@jasondebolt) November 3, 2025
If @CharlesSchwab doesn’t vote for Elon Musk’s 2025 CEO Performance Award plan, I’ll move all my assets to another brokerage. My followers, many of whom also hold assets with Schwab and collectively own at least hundreds of millions in $TSLA, may do the same.
I can’t in good… https://t.co/6iUU6PdzYx
— Sawyer Merritt (@SawyerMerritt) November 3, 2025
ready to help with the @CharlesSchwab exodus
— Gali (@Gfilche) November 3, 2025
At least six of Charles Schwab’s ETFs have voted against Tesla’s Board recommendation to support the compensation plan for Musk. The six ETFs represent around 7 million Tesla $TSLA shares.
Jason DeBolt, an all-in Tesla shareholder, summarized the firm’s decision really well:
“As a custodian of ETF shares, your fiduciary duty is to vote in shareholders’ best interests. For a board that has delivered extraordinary returns, voting against their recommendations doesn’t align with retail investors, Tesla employees, or the leadership we invested to support. If Schwab’s proxy voting policies don’t reflect shareholder interests, my followers and I will move our collective tens of millions in $TSLA shares (or possibly hundreds of millions) to a broker that does, via account transfer as soon as this week.”
Tesla shareholders will vote on Musk’s pay package on Thursday at the Annual Shareholders Meeting in Austin, Texas.
It seems more likely than not that it will pass, but investors have made it clear they want a decisive victory, as it could clear the path for any issues with shareholder lawsuits in the future, as it did with Musk’s past pay package.
Elon Musk
Norway’s $2 trillion sovereign wealth fund votes against Elon Musk’s 2025 performance award
The fund is managed by Norges Bank Investment Management (NBIM), and it holds a 1.14% stake in Tesla valued at about $11.6 billion.
Norway’s $2 trillion sovereign wealth fund has voted against Elon Musk’s 2025 performance award, which will be ultimately decided at Tesla’s upcoming annual shareholder meeting.
The fund is managed by Norges Bank Investment Management (NBIM), and it holds a 1.14% stake in Tesla valued at about $11.6 billion.
NBIM’s opposition
NBIM confirmed it had already cast its vote against Musk’s pay package, citing concerns over its total size, dilution, and lack of mitigation of key person risk, as noted in a CNBC report. The fund acknowledged Musk’s leadership of the EV maker, and it stated that it will continue to seek dialogue with Tesla about its concerns.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk- consistent with our views on executive compensation. We will continue to seek constructive dialogue with Tesla on this and other topics,” NBIM noted.
The upcoming Tesla annual shareholder meeting will decide whether Musk should receive his proposed 2025 performance award, which would grant him large stock options over the next decade if Tesla hits several ambitious milestones, such as a market cap of $8.5 trillion. The 2025 performance award will also increase Musk’s stake in Tesla to 25%.
Elon Musk and NBIM
Elon Musk’s proposed 2025 CEO performance award has proven polarizing, with large investors split on whether the executive should be given a pay package that, if fully completed, would make him a trillionaire.
Institutional Shareholder Services and Glass Lewis have recommended that shareholders vote against the deal, and initiatives such as the “Take Back Tesla” campaign have rallied investors to oppose the proposed performance award. On the other hand, other large investors such as ARK Invest and the State Board of Administration of Florida (SBA) have urged shareholders to approve the compensation plan.
Interestingly enough, this is not the first time that Musk and NBIM have found themselves on opposing sides. Last year, NBIM voted against reinstating Musk’s 2018 performance award, which had already been fully accomplished but was rescinded by a Delaware judge.
Later reports shared text messages between Musk and NBIM Chief Executive Nicolai Tangen, who was inviting the CEO to a dinner in Oslo. Musk declined the invitation, writing, “When I ask you for a favor, which I very rarely do, and you decline, then you should not ask me for one until you’ve done something to make amends. Friends are as friends do.”
Investor's Corner
Michael Dell points out practical advantage of Elon Musk’s proposed pay package
As pointed out by the Dell Technologies CEO, Musk will only be rewarded if he delivers extraordinary value to shareholders
Michael Dell has weighed in on Elon Musk’s controversial 2025 CEO Performance Award, offering a grounded perspective amidst the noise surrounding the pay package today.
As pointed out by the Dell Technologies CEO, Musk will only be rewarded if he delivers extraordinary value to shareholders. Musk would quite literally receive no compensation if he fails to achieve his targets.
Dell emphasizes results over rhetoric
Dell shared his thoughts about Musk’s 2025 CEO Performance Award in a post on X.“Vote FOR Elon Musk. The award is only achieved IF he hits exceptionally ambitious market-cap and operational milestones—if he falls short, he gets nothing,” Dell wrote in his post.
“If he succeeds, shareholders will win big through unprecedented value creation, and he will earn added voting rights to continue driving Tesla’s long-term vision.”
Musk replied with a short “Thanks Michael,” acknowledging Dell’s support. Dell’s framing cuts through the debate surrounding Musk’s compensation, as he simply focused on the incentive structure’s risk-reward balance.
Musk’s ambitious pay package
Elon Musk’s 2025 CEO Performance Award requires Tesla’s market capitalization to rise from roughly $1.1 trillion today to $8.5 trillion within a decade. This would make Tesla more valuable than any company in history.
Apart from this, Tesla’s operating profit must also grow from $17 billion to $400 billion annually. Musk must also lead the company to several product-related milestones, such as 20 million cumulative vehicle deliveries, 10 million Full Self-Driving subscriptions, 1 million Tesla Bots, and 1 million operating Robotaxis.
So far, proxy advisors Glass Lewis and ISS have urged shareholders to vote against the plan. Some prominent investors, including ARK Invest CEO Cathie Wood, however, have voiced strong support for the plan. Wood called Musk “the most productive human being on earth,” arguing that his vision and ability to attract talent are central to Tesla’s success.
Tesla investors are ditching Charles Schwab after its vote against Musk comp plan
Tesla Cybertruck explosion probe ends with federal involvement and new questions
Norway’s $2 trillion sovereign wealth fund votes against Elon Musk’s 2025 performance award
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