SpaceX and Tesla CEO and X owner Elon Musk speaks at the Milken Conference 2024 Global Conference at the Beverly Hilton Hotel in Beverly Hills, California, United States on May 6, 2024.
David Swanson | Reuters
Proxy advisory firm Glass Lewis said on Saturday it has urged Tesla shareholders to reject a $56 billion compensation package for Chief Executive Elon Musk, which if passed would be the largest pay package for a CEO in corporate America. .
The report cited the “excessive size” of compensation transactions, the dilution effect of exercise and concentration of ownership as reasons. It also cited Musk’s “series of extremely time-consuming projects” that expanded with his high-profile acquisition of Twitter, now known as X.
The pay package was proposed by Tesla’s board of directors, which has been repeatedly criticized for its close relationship with the billionaire. The plan has no salary or cash bonuses and sets rewards based on Tesla’s market value rising to $650 billion within 10 years from 2018.
In January, Delaware Chancery Court Judge Katherine McCormick invalidated the original pay package. Musk then attempted to move Tesla’s registration from Delaware to Texas.
Glass Lewis also criticized the proposed relocation to Texas as creating “uncertain benefits and additional risks” for 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 deserved the pay package as the company hit ambitious revenue and share price targets .
Musk became Tesla CEO in 2008. billion, automobile production increased sevenfold.
Proxy advisers are also recommending shareholders vote against the re-election of billionaire brother Kimbal Musk to the board, as well as former 21st Century Fox CEO James Murdoch.
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