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Tesla shareholders expected to vote this week on reinstatement That of CEO Elon Musk A $56 billion pay package, which was struck down earlier this year by a Delaware judge, is being urged by a proxy advisory firm to be scrapped.
Glass Lewis said Saturday he urged Tesla shareholders to reject the ambitious plan, citing its “excessive size,” the impact of Musk’s exercise of stock options, and the company’s concentrated ownership.
He also cited Musk’s “extremely long list of projects,” which grew following the acquisition of Twitter, now known as X, where Musk serves as chief technology officer and executive chairman. Musk is also CEO of SpaceX and artificial intelligence company xAI, and founder of Neuralink and The Boring Company.
Tesla’s board of directors proposed reinstating the compensation system, which includes no salary or cash bonuses and provides rewards in the form of stock options awarded based on Tesla’s market value reaching $650 billion in the 10 years following 2018. The company is currently valued at approximately $571.6 billion, according to LSEG data.
TESLA ASKS SHAREHOLDERS TO RESTORE ELON MUSK’S SALARY AND MOVE TO TEXAS
Tesla is urging shareholders to vote to reinstate Elon Musk’s $56 billion pay package. (Photo by Apu Gomes/Getty Images/Getty Images)
Musk’s original payroll package has been canceled in January in a decision by Delaware Court of Chancery Judge Kathaleen McCormick. She ruled in favor of a shareholder lawsuit to overturn the package and wrote in her decision that the package was excessively large because it was by far the largest compensation for the CEO of a publicly traded company.
| Teleprinter | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 179.24 | +5.50 | +3.17% |
McCormick also criticized Tesla’s board for failing to fully disclose to shareholders the close relationship between the directors who approved the compensation package and Musk, as well as the relative ease with which Tesla would meet the benchmarks related to the salary brackets. their given compensation plan. the growth of the company at the time.
TESLA IN TEXAS? ELON MUSK ANNOUNCES MAJOR SHAREHOLDER VOTE
Musk moved SpaceX’s headquarters from Delaware to Texas and is looking to do the same with Tesla. (Photo by Michael M. Santiago/Getty Images / Getty Images)
Tesla urged shareholders to reaffirm their approval of Musk’s compensation plan. In a interview with the Financial Times Earlier this month, Tesla Chairman Robyn Denholm said Musk deserved the compensation because the company had met ambitious revenue and stock price goals.
Following the January decision canceling the salary package, Musk decided to change State of incorporation of Tesla from Delaware to Texas – a proposal that shareholders were also asked to vote on.
ELON MUSK’S $56 BILLION PACKAGE VOID BY JUDGE
Tesla reported its first quarterly sales decline in nearly four years in the first quarter of this year. (Photo by Justin Sullivan/Getty Images / Getty Images)
The proxy advisor recommended that shareholders oppose Tesla’s change in incorporation, saying the change would result in “uncertain benefits and additional risk” for shareholders.
Musk has been CEO of Tesla since 2008 and has been instrumental in the electric vehicle maker’s rise to the top. most valuable car manufacturer in terms of market capitalization. He took the company from a $2.2 billion loss in 2018 to a $15 billion profit and increased vehicle production sevenfold, according to the Vote Tesla campaign website.
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The company has faced headwinds amid slowing consumer interest in electric vehicles, with Tesla reporting a decline in its first-quarter sales volume for the first time in nearly four years.
Reuters contributed to this report.
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