Tesla shareholders To Oppose CEO Elon Musk’s $56 billion compensation package

A coalition of Tesla Inc. shareholders is urging fellow investors to reject a $56 billion pay package for CEO Elon Musk at the company’s annual meeting on June 13. This coalition, which includes Amalgamated Bank, SOC Investment Group, and six other stakeholders, argues that Musk is too distracted by his commitments to five other companies to effectively serve Tesla’s interests. They also recommend voting against the re-election of Directors Kimbal Musk, Elon Musk’s brother, and James Murdoch.

The group claims Tesla is experiencing significant governance issues that require immediate action. In a letter, they emphasised that Musk’s compensation package, originally approved in 2018 and tied to Tesla’s market capitalization and operational targets, was voided by a Delaware judge in January over concerns it wasn’t in shareholders’ best interests.

Despite this, Tesla’s Board is seeking a second vote on the pay package to demonstrate continued investor support. They have also hired a strategic adviser to boost retail investor participation.

Over a year ago, many coalition members expressed concerns about Musk’s numerous obligations in an open letter to Tesla’s Board, requesting a meeting with Board Chair Robyn Denholm, who did not respond. The shareholders also noted that Musk’s acquisition of Twitter, now called X, has negatively impacted Tesla’s performance, along with disappointing sales and first-quarter results. They argue that Tesla needs a full-time CEO focused on the company’s long-term success.