The SOC Group, formerly known as the CtW Investment Group, works with pension funds sponsored by a coalition of unions representing over 2 million members; many of those funds are Tesla investors.

In a letter dated Aug. 19, 2025, addressed to Erik Wittman, deputy general counsel and head of enforcement at Nasdaq, SOC expressed “serious concerns” about Musk’s new compensation package. Specifically, SOC said it was concerned that Tesla’s board circumvented Nasdaq listing rules when awarding Musk a “2025 CEO Interim Award,” disclosed earlier this month. The group claims this equity award should have required a shareholder vote, as stipulated under Nasdaq’s rules, given that it materially amended compensation plans.

Tesla’s board approved Musk’s new equity package under the company’s 2019 Equity Incentive Plan, largely as compensation for his previously awarded—and overturned—$56 billion options package from 2018, known as the “2018 CEO Performance Award.” That older award was (twice) overturned by the Delaware Chancery Court owing to questions regarding board independence—a decision currently being appealed at the Delaware Supreme Court.

Fortune’s Shawn Tully reported that the new package will only apply if Musk and Tesla lose on appeal in Delaware. He also noted that unlike with the $56 billion award, the newer $29 billion award includes restrictions that protect shareholders: The shares vest on the second anniversary of the grant, or early August 2027, only if Musk serves for the entire period as CEO or chief of product development or operations. Musk can’t sell any of those vested shares until five years later, or on Aug. 3, 2030.

Fortune’s Amanda Gerut reported that, such restrictions notwithstanding, the package lacks hard performance targets for Musk. Brian Dunn, director of the Institute for Compensation Studies at Cornell University, told Fortune that experts sometimes refer to these as “fog-the-mirror grants.” In other words: “If you’re around and have enough breath left in you to fog the mirror, you get them.”

The objections lobbied by SOC Investment Group in its letter have nothing to do with either feature of the grants. The group argues that the Tesla board dodged shareholder approval for the package, in contravention of Nasdaq listing policy.

Tejal Patel, executive director of the SOC Investment Group, told Fortune in an interview that the “real issue is the fact that the original plan … was pretty clear in the disclosures that the company did not intend to include Elon Musk in that plan.” Acknowledging that such issues are usually raised with the Securities and Exchange Commission, she added: “Admittedly, this is the first time I’ve flagged something like this to Nasdaq, [and that’s] because it was a very specific listing standard.” Her understanding of the Nasdaq standard is that “this is exactly what it was designed to avoid.”

Shareholders likely ‘did not believe’ they were voting to approve a new Musk package

The SOC Investment Group emphasizes that when Tesla shareholders approved the 2019 Equity Incentive Plan, company disclosures explicitly excluded Musk from eligibility, stating that his compensation would be exclusively tied to the extraordinary 2018 award. “When shareholders voted on the 2019 Plan it is likely that, based on the available disclosures and research, they did not believe they were voting on an equity plan that would cover compensation to Mr. Musk,” the SOC letter notes, “precisely because of the ‘truly extraordinary’ nature of the 2018 CEO Performance Award.”

The SOC letter also notes that Tesla’s 2019 proxy statement repeated multiple times that the 2019 plan was not intended to cover awards to Musk. Furthermore, the letter mentions that major proxy advisory firms indicated that the 2018 CEO Performance Award was “intended to be the sole means of compensation for Mr. Musk, relying on the Company’s disclosures.”

Therefore, SOC writes, the 2025 CEO Interim Award “appears to expand the class of participants under the 2019 Plan in manner that would be sufficiently material to require a separate shareholder vote.”

The letter also warns that Tesla’s board has indicated further interim awards could follow, potentially bypassing shareholder votes while the Delaware case, the so-called Tornetta litigation, is pending. The SOC letter urges Nasdaq to act to “restore ‘the rightful balance between shareholder and management’s interests,’” prevent dilution, and ensure executive compensation transparency.

SOC has “real concerns over director independence,” Patel told Fortune. “This is sort of the outcome of having a board that is not independent.” She said her group is concerned with issues over a lack of director independence and the juggling of responsibilities by Elon Musk, and matters have “come to a head in the last several months.” This timeline overlaps with Musk’s brief engagement as a special advisor to the White House, including extensive involvement with the Department of Government Efficiency, or DOGE. The new compensation plan, if anything, “was an opportunity for the board to get Musk to focus on Tesla, and instead” they’ve arrived at this package, she said. She also noted that the conditions under which Musk would receive the same pay, even if he was a chief of product development or operations, is “pretty unheard-of.”

A vocal, active shareholder

SOC Investment Group has a long and active history of engagement with Tesla, focusing on issues such as executive compensation, governance, board independence, and labor rights. The group has repeatedly opposed large pay packages for Musk—including leading campaigns to encourage shareholders to vote against Musk’s $56 billion option award and calling for votes against related awards, especially when it believed proper shareholder approval procedures were circumvented or governance standards were not met.

The group has also urged Tesla shareholders to vote against the reelection of certain directors, such as Kimbal Musk and James Murdoch, citing concerns about lack of board independence from Elon Musk and alignment with shareholders’ interests. Similar to its current letter to Nasdaq, it has requested investigations by regulators into Tesla’s governance practices, arguing that the company’s board favors Musk’s interests over those of public shareholders. For example, the group asked the SEC to probe Tesla’s plan to shrink its board in 2022.

The group has also joined with other investors in co-filing shareholder resolutions calling for Tesla to adopt comprehensive labor rights policies, including noninterference with worker organizing and compliance with global labor standards. SOC has been involved in webinars and resolutions highlighting risks related to Tesla’s approach to unions and labor issues across several countries.

Tesla has not publicly responded to the letter and did not immediately respond to Fortune’s request for comment.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.