Frost expressed her belief that the compensation offered to Musk is not proportional to the company's performance.

CalPERS, which is listed among the top 30 investors in Tesla, currently holds 9.5 million shares according to LSEG data. As of now, the U.S. pension fund has not responded to a Reuters request for comment on the matter.

In response to Frost's statement, Musk took to social media platform "X" to assert that CalPERS had "broken the deal." Musk argued that all the contractual milestones had been met, making Frost's view senseless. He further accused the U.S. pension fund of breaking their promise.

Proxy advisory firm Glass Lewis, on Saturday, urged Tesla shareholders to reject the proposed pay package. In a separate filing on Wednesday, Tesla countered this opposition by emphasizing that Musk's leadership and his substantial stake in the company serve to create wealth for Tesla stockholders. Musk's pay package, touted as the largest in corporate America, is reliant on Tesla's market value reaching up to $650 billion over the next decade.

This is not the first time Musk's pay package has encountered opposition. In January, a Delaware judge rejected the compensation plan, calling it an "unfathomable sum" that disadvantaged shareholders. However, last month, Tesla requested that shareholders reaffirm their approval for Musk's pay package, which was initially set in 2018.

In a separate recommendation, Egan-Jones Proxy Services suggested that investors support Musk's pay package. In an email from the company, Egan-Jones emphasized that the continuation of this compensation plan is vital for maintaining Musk's leadership and motivation, which are essential for Tesla's sustained growth and innovation.

Furthermore, Egan-Jones also recommended that investors back Tesla's proposal to transfer its state of incorporation from Delaware to Texas. The firm believes that this move would align legal and operational bases and potentially enhance operational efficiency and corporate culture.

While CalPERS opposes Musk's lucrative pay package, the battle between the pension fund and the Tesla CEO intensifies. As shareholders await the final decision, the outcome will undoubtedly affect Tesla's future trajectory and the overall perception of executive compensation.

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