Elon Musk’s $56 billion compensation plan, setting up another hurdle for the electric carmaker’s board.ISS said the pay package, initially approved by shareholders in 2018, is not considered warranted. The opposition comes days after another prominent proxy adviser, Glass Lewis & Co., recommended investors vote down the Musk remuneration plan.“The award value was considered outsized from the start and it has failed to accomplish certain of the board’s stated objectives from 2018," ISS said.
“Some investors may find the board’s argument compelling, that it would be unfair for Musk not to receive the award. However, the concerns raised, both back in 2018 and in the interim, have not been sufficiently mitigated, particularly given that the board has effectively only offered shareholders an ‘all or nothing’ option in this vote."Musk’s compensation has been hotly contested this year.
In January, a Delaware judge struck down the pay package, saying the carmaker’s board wasn’t fully transparent with shareholders when they crafted the deal. Directors are asking investors to vote on it a second time at Tesla’s June 13 annual meeting to demonstrate shareholders still back the plan, which could aid in a legal appeal of the decision.Proxy firms such as ISS often have sway over shareholders, especially large institutions that hold stock in passive funds.
However, the proxy adviser and Glass Lewis both recommended shareholders reject the Musk pay deal when it was voted on forthe first time in 2018. About three-quarters of investors still supported the package.The outcome of the vote is only advisory.
However, a loss would be a major embarrassment to Tesla’s board and to its top executive. Musk has also threatened to build products
. Read more on livemint.com