Tesla investors are pushing back against what could be the largest compensation package in history for a CEO. Specifically, a group including the New York City pension funds has filed a notice urging fellow shareholders to vote against Elon Musk’s proposed $46 billion stock-option package at Tesla’s upcoming shareholder meeting on June 13.
According to the filing, the investors are concerned that the Tesla board is too reliant on Musk, allowing him to split his time among various companies such as the Boring Company, Neuralink, SpaceX, and X, rather than focusing solely on Tesla. They also highlighted how Musk has been poaching talent from Tesla for his other ventures, causing further worries about his commitment to the electric vehicle maker.
Musk, on the other hand, has been rallying support from individual retail investors through social media and Tesla’s promotional efforts. Despite the dissent from investors like Amalgamated Bank and AkademikerPension, Musk’s supporters see him as a visionary leader essential to Tesla’s success.
The proposed pay plan, which was previously rescinded but reintroduced by Tesla, faces scrutiny from investors who fear that Musk’s borrowed stakes in the company could impact stock prices negatively. Additionally, concerns have been raised about Tesla’s underperformance relative to its competitors due to Musk’s divided attention.
While the Tesla board defends the pay plan, showcasing Musk’s past achievements to justify the compensation, critics argue that the current challenges facing Tesla require a more focused and dedicated CEO. The upcoming shareholder meeting is set to be a battleground between those who believe Musk is indispensable and those who think his pay package is excessive given the company’s current struggles.
Vocabulary List:
- Compensation (noun): Somethingtypically moneyawarded to someone in recognition of losssufferingor injury.
- Shareholders (noun): A person or institution that owns shares in a company.
- Rallying (noun): A gathering of a large group of people for a common purpose.
- Poaching (noun): The illegal huntingcapturingor taking of wildlife.
- Underperformance (noun): Performing less well than expected.
- Indispensable (adjective): Absolutely necessary or essential.
