Next month, Tesla shareholders will vote on a pay package for Elon Musk worth around $56 billion—and a firm advising major institutional investors has urged them to reject it. Proxy advisory firm Glass Lewis recommended against approving the deal in a report Saturday, citing Musk's other activities and the "excessive size" of what would be the largest CEO compensation package in US history, Reuters reports. The compensation package was voided by a judge in Delaware earlier this year. Musk is seeking to shift the company's legal corporate home to Texas, a move shareholders will also vote on.
"Musk's slate of extraordinarily time-consuming projects unrelated to the Company was well-documented before the 2018 grant, and only expanded with his high-profile purchase of the company now known as X," Glass Lewis said. Tesla, which argues that Musk has met extremely ambitious performance goals, has bought ads in an effort to win approval of the package, NBC News reports. The pay package, which consists entirely of stock options, was initially approved by around three-quarters of shareholders in 2018, Bloomberg reports. Glass Lewis recommended against it at the time, saying it would dilute other holdings and was too expensive.
In its report Saturday, Glass Lewis also advised shareholders against approving the move to Texas, citing the "uncertain benefits and additional risk" involved. Tesla's board of directors, which proposed the pay package, has been criticized over members' close ties to Musk, reports Reuters. Glass Lewis recommended against re-electing Kimbal Musk, the billionaire's brother, to the board. Bloomberg notes that the June 13 vote is only advisory, but it will be a "major embarrassment" and a sign investors are losing faith in Musk if shareholders vote against the pay package. Musk has threatened to take his projects elsewhere if he doesn't get a bigger stake in Tesla. (More Tesla stories.)
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