Tesla Shareholders Urged to Reject Elon Musk’s $56 Billion Pay Package

Proxy advisory firm Glass Lewis is urging Tesla shareholders to reject CEO Elon Musk’s proposed $56 billion pay package, which would be the largest ever awarded to a CEO in the US.

The firm criticizes the plan for its “excessive size” and potential negative impact on shareholders. They mention the dilutive effect of stock options and the concentration of ownership in Musk’s hands. Additionally, they raise concerns about Musk’s “already extraordinarily time-consuming projects,” which have grown with his acquisition of Twitter (now known as X).

The pay package, proposed by Tesla’s board (which has been criticized for its close ties to Musk), offers no salary or cash bonus but is tied to Tesla’s market value reaching $650 billion within a decade. The company currently sits around $571.6 billion.

This proposal comes after a Delaware court judge voided the original pay package in January. Musk then attempted to move Tesla’s incorporation to Texas. Glass Lewis also advises against this move, citing “uncertain benefits and additional risk” for shareholders.

Tesla, however, is urging shareholders to approve the compensation plan. Board Chair Robyn Denholm argued that Musk deserves the pay due to achieving ambitious revenue and stock price targets.

The proxy advisor also recommends voting against the re-election of Kimbal Musk (Elon’s brother) to the board, while supporting the re-election of James Murdoch (former CEO of 21st Century Fox).

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