Tesla shareholders recommended rejecting Musk’s $56 billion payment.
(Reuters) – Proxy advisory firm Glass Lewis said on Saturday it urged Tesla (NASDAQ:) shareholders to reject a $56 billion pay package for Chief Executive Officer Elon Musk. If passed, the package would be the largest pay package for a CEO of a U.S. company. .
The report cited reasons such as the “excessive scale” of pay negotiations, the dilutive effect of events and concentrated ownership. It also touched on Musk’s “incredibly time-consuming list of projects” that expanded with the acquisition of Twitter, now known as X.
The pay package was proposed by Tesla’s board, which has been repeatedly criticized for its close ties to the billionaire. The package includes no salary or cash bonuses, and compensation is set based on Tesla’s market value, which has grown to up to $650 billion over a decade starting in 2018. The company is currently valued at about $571.6 billion, according to LSEG data.
Last January, Delaware Court Judge Kathaleen McCormick (NYSE:) invalidated the original pay package. Musk attempted to move Tesla’s incorporation from Delaware to Texas.
Glass Lewis also criticized the proposed move to Texas, saying it presents “uncertain benefits and additional risks” to shareholders.
Tesla urged shareholders to reaffirm their compensation approval.
In an interview this month, Tesla board chair Robyn Denholm told the Financial Times that Musk deserves his pay package because the company has achieved ambitious targets for sales and share price.
Musk became Tesla’s CEO in 2008. In recent years, he has helped improve performance, with the company turning a $15 billion profit from a $2.2 billion loss in 2018 and producing seven times more vehicles, according to the online campaign website Vote Tesla. .
The voting adviser also recommended shareholders vote against the re-election of board member Kimbal Musk, the billionaire’s brother, and recommended the re-election of former 21st Century Fox CEO James Murdoch.
