Proxy firm advises shareholders to reject Elon Musk’s $56 billion pay package

Proxy advisory firm Glass Lewis has advised Tesla shareholders to oppose a proposed $56 billion compensation package for CEO Elon Musk, which, if approved, would become the largest such package for a CEO in corporate America. Glass Lewis cited concerns over the size of the package, its potential dilutive effect, and Musk’s involvement in various time-consuming projects, including the acquisition of Twitter, now called X.

The proposed pay package, put forth by Tesla’s board of directors, has faced criticism for its lack of salary or cash bonus, instead offering rewards tied to Tesla’s market value reaching up to $650 billion over a decade. Currently, the company’s market value stands at approximately $571.6 billion. In January, a Delaware court voided the original pay package, prompting Musk to consider relocating Tesla’s state of incorporation from Delaware to Texas.

Glass Lewis also raised concerns about the proposed move to Texas, citing uncertain benefits and added risk for shareholders. Despite this, Tesla has urged shareholders to reaffirm their support for the compensation package. Tesla’s board chair, Robyn Denholm, defended Musk’s eligibility for the package, pointing to the company’s achievement of ambitious revenue and stock price targets.

Since assuming the role of CEO in 2008, Musk has played a pivotal role in Tesla’s turnaround, helping the company achieve a $15 billion profit from a $2.2 billion loss in 2018. Additionally, vehicle production has increased sevenfold, according to data from the online campaign website, Vote Tesla.

Glass Lewis also recommended voting against the reelection of board member Kimbal Musk, Elon’s brother, while endorsing the reelection of former 21st Century Fox CEO James Murdoch.”