Proxy advisory firm Glass Lewis has urged Tesla shareholders to reject Elon Musk’s proposed $56 billion pay package. This is the largest compensation package ever proposed for a corporate executive in the United States.
Glass Lewis has raised concerns about the size of the package. It also expressed worries about its potential dilutive effect and the concentration of ownership it would create. Glass Lewis has also pointed out Musk’s involvement in various demanding ventures, including managing Twitter as X, as a reason for their opposition.
The proposed package does not include a salary or cash bonuses but instead ties rewards to the company’s market value. In order for Musk to receive full compensation, Tesla’s market value must reach $650 billion within a decade, starting in 2018. Currently, Tesla’s market value is around $571.6 billion.
Earlier this year, a Delaware court annulled the original pay deal, leading Musk to consider relocating Tesla’s state of incorporation from Delaware to Texas. Glass Lewis has criticised this potential move, warning of uncertain benefits and additional risks for shareholders.
Despite Glass Lewis’ recommendations, Tesla is still advocating for the approval of Musk’s compensation package. In an interview with the Financial Times, Robyn Denholm, Tesla’s board chair, defended Elon Musk’s leadership. She emphasised the company’s impressive revenue and stock price milestones.
Elon Musk has been the CEO of Tesla since 2008 and has played a crucial role in taking the company to new heights. Under his leadership, Tesla has produced seven times more vehicles than before. Glass Lewis has also recommended shareholders vote against the re-election of Kimbal Musk, Elon Musk’s brother.
In response to Glass Lewis’ recommendations, Tesla stated that Musk is creating wealth for Tesla stockholders. Tesla also mentioned that Musk has a personal stake in the company’s success.
