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Tesla Shareholders Advised to Reject Musk’s $56 Billion Payment
(Reuters) – Proxy consultancy firm Glass Lewis said on Saturday it had asked Tesla shareholders to reject a $56 billion pay package for Chief Executive Elon Musk, which if approved would be the largest pay package for a CEO. in corporate America.
The report cited reasons such as the “excessive size” of the salary agreement, the dilutive effect on the exercise and the concentration of ownership. He also mentioned Musk’s “extraordinarily time-consuming list of projects,” which expanded with his purchase of Twitter, now known as X.
The salary package was proposed by Tesla’s board of directors, which has been repeatedly criticized for its close ties to the billionaire. The package does not include salary or cash bonuses and sets rewards based on Tesla’s market value, increasing to up to $650 billion over the 10 years starting in 2018. The company is currently valued at about $571, 6 billion, according to LSEG data.
In January, Judge Kathaleen McCormick of the Delaware Court of Chancery voided the original pay package. Musk then sought to transfer Tesla’s state of incorporation from Delaware to Texas.
Glass Lewis also criticized the proposed move to Texas as offering “uncertain benefits and additional risks” to shareholders.
Tesla urged shareholders to reaffirm their approval of the compensation.
In an interview this month, Tesla Chairman Robyn Denholm told the Financial Times that Musk deserves the pay package because the company has met ambitious revenue and share price targets.
Musk became CEO of Tesla in 2008. In recent years, he has helped improve results, leading the company to a profit of $15 billion after a loss of $2.2 billion in 2018, and seven times more vehicles have been produced, according to an online campaign site, Vote Tesla. .
The proxy advisor also recommended that shareholders vote against the re-election of board member Kimbal Musk, the billionaire’s brother, while the re-election of former 21st Century Fox CEO James Murdoch was recommended.
(Reporting by Urvi Dugar in Bengaluru; Editing by David Gregorio)