Group of Tesla shareholders ask investors to vote against Musk's compensation package
They say it’s not in the electric vehicle maker’s best interest.
A group of Tesla shareholders is asking investors to vote against a compensation package worth more than $40 billion for CEO Elon Musk, saying that it's not in the electric vehicle maker's best interest.
Tesla is struggling with falling global sales, slowing electric vehicle demand, an aging model lineup and a stock price that has tumbled 30% this year.
The shareholder group, which includes New York City Comptroller Brad Lander, SOC Investment Group and Amalgamated Bank, said in a letter to shareholders that ratification of Musk's pay package would do nothing to promote Tesla's long-term growth and stability.
There's also concern that approval of the pay package will potentially lead to lawsuits arguing that it is corporate waste. And Musk is viewed as a part-time CEO at Tesla, with his time increasingly being spent on other business commitments, the letter said.
“Shareholders should not pretend that this award has any kind of incentivizing effect—it does not. What it does have is an excessiveness problem, which has been glaringly apparent from the start,” the group said.
They noted that if shareholders ratify the compensation package, it's possible that another plan will be put forth next year.
“Given Tesla’s history of exponentially larger awards, Musk may well ask for another award,” the group said.
The group is also asking investors to vote against the reelection of board members Kimbal Musk, Elon's brother, and James Murdoch, a former executive at media company Twenty-First Century Fox.
Last month Tesla asked shareholders to restore Musk's pay package, which was valued at $56 billion at the time, that was rejected by a Delaware judge this year.
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