Tesla shareholders advised to reject Elon Musk's $56B pay package
Proxy advisory firm Glass Lewis has advised Tesla shareholders to reject a proposed $56 billion pay package for CEO Elon Musk. The firm cites the "excessive size" of the deal, its potential dilutive effect, and the concentration of ownership as reasons for their recommendation. Additionally, they highlighted Musk's "slate of extraordinarily time-consuming projects," which have multiplied following his high-profile acquisition of Twitter, now known as X.
Details of Musk's controversial pay package
The pay package, proposed by Tesla's board of directors, has been criticized for its close ties with Musk. It includes no salary or cash bonus and sets rewards based on Tesla's market value rising to as much as $650 billion over the years from 2018. Currently, Tesla is valued at approximately $571.6 billion, according to LSEG data. The original pay package was voided by Judge Kathaleen McCormick of Delaware's Court of Chancery earlier this year.
Tesla's response to criticisms of Musk's pay package
Despite the criticisms, Tesla has urged its shareholders to reaffirm their approval of the compensation. In a recent interview with Financial Times, Tesla's board chair Robyn Denholm stated that Musk deserves the pay package because the company hit ambitious targets for revenue and its stock price. Musk, who has served as Tesla CEO since 2008, has significantly improved the company's results in recent years according to Vote Tesla, an online campaign website.
Glass Lewis's recommendations on Tesla's board members
In addition to advising against Musk's pay package, Glass Lewis also recommended that shareholders vote against the re-election of board member Kimbal Musk, Elon Musk's brother. However, they did recommend the re-election of former 21st Century Fox CEO James Murdoch. These recommendations come amidst ongoing discussions about the proposed pay package and its potential impact on Tesla's future.
