Glass Lewis urged Tesla shareholders to reject Elon Musk's $56 billion pay deal. The proxy advisory company opposed the pay agreement due to its "excessive size" and dilutive impact upon exercise, and its concentration of ownership.
Glass Lewis noted Elon Musk's many challenging endeavors, notably his recent purchase of Twitter, now X, according to Reuters.
Tesla's board of directors' remuneration package has been criticized for its substantial links to Musk. The package has no salary or cash incentive and awards are based on Tesla's market value exceeding $650 billion over 10 years from 2018. LSEG values Tesla at $571.6 billion.
Elon Musk sought to move Tesla's incorporation state to Texas after Delaware's Court of Chancery Judge Kathaleen McCormick nullified the first compensation package in January.
Glass Lewis questioned this decision for "uncertain benefits and additional risk" for shareholders.
Elon Musk Deserves the Massive Pay, Tesla Claims
Tesla wants shareholders to approve the payment again. Tesla board chair Robyn Denholm told the Financial Times that Musk deserves the compensation package.
Since Elon Musk became Tesla CEO in 2008, he helped the firm recover from a $2.2 billion deficit in 2018 to a $15 billion profit and a sevenfold increase in vehicle production, according to Vote Tesla.
Glass Lewis also advised shareholders to vote against Kimbal Musk, Elon Musk's brother, and former 21st Century Fox CEO James Murdoch.
Glass Lewis said shareholders faced "uncertain benefits and additional risk" from the move.
The proxy counsel also advised shareholders to vote against Kimbal Musk, Elon Musk's brother, and former 21st Century Fox CEO James Murdoch.
Tesla's annual meeting is set on June 13. According to Bloomberg, The corporation recruited a strategy advisor to encourage retail investor involvement in the package. Elon Musk's $56 billion compensation deal is possibly the biggest package for a CEO in corporate America.
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(Photo : Kevin Winter/Getty Images)
Elon Musk attends the 10th Annual Breakthrough Prize Ceremony at Academy Museum of Motion Pictures on April 13, 2024 in Los Angeles, California.
Sour Relationship Between Elon Musk and Tesla Investors
Numerous signatories to Monday's petition addressed an open letter to Tesla's board over a year ago, raising concerns about Elon Musk's various commitments and seeking a meeting with board chair Robyn Denholm. The group said Denholm never replied.
Despite Musk co-founding Tesla, they had significant disagreements in the past and present. as prevoisly reported by TechTimes, Tesla's earlier tease about going public caused a major disaster for years before it became a case, showing how Musk is scrutinized even by his shareholders.
Tesla shareholders blamed Elon Musk's purchase of Twitter, now X, for its underperformance. They highlighted that the board gave Musk a large CEO remuneration to keep him focused on Tesla's long-term performance.
Tesla's sales patterns and dismal first-quarter statistics also worried the shareholder coalition in their letter.
They noted that despite Tesla's floundering performance, the Tesla board "has yet to ensure" that the world's top EV maker "has a full-time CEO" focused on the firm's "long-term sustainable success."
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