Influential proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have recommended that Tesla shareholders vote against Elon Musk's proposed $51-56 billion pay package, citing concerns about its excessive nature and Musk's numerous side projects.
Tesla's board plans to have a revote on the 2018 pay package at the annual shareholder meeting on June 13, despite the company's success in meeting growth goals and posting record vehicle deliveries in 2023, as it faces challenges such as falling sales, slowing demand, and a declining stock price. A Delaware court voided the package earlier this year.
A coalition of shareholders holding a small portion of Tesla's stock has urged opposition to the pay deal, while Musk has criticized shareholders opposing his pay package.
ISS described the share options deal as "outsized" and not sufficiently mitigated, calling the compensation excessive and failing to meet certain board objectives, such as focusing Musk on Tesla over his other ventures.
Glass Lewis also urged investors to vote against the deal due to its size and Musk's other projects, and expressed concerns about the potential dilution of shareholder value.
Musk has actively engaged with shareholders, asking them to reach out with questions and making numerous posts on X (Twitter) regarding the vote on his pay package.
Musk criticized ISS and Glass Lewis for having too much power in influencing shareholder decisions.
A loss in the vote could be a major blow to the board and raise leadership questions about Musk.
Sources: Business Insider, Reuters, CNN, Los Angeles Times, The New York Times, CNBC, The Information, Yahoo Finance
This article was written in collaboration with Generative AI news company Alchemiq.
