Glass Lewis Advises Tesla Shareholders to Reject Musk’s $56 Billion Pay Package
Glass Lewis advises Tesla shareholders to reject Elon Musk's $56 billion pay package, citing concerns over its size, ownership concentration, and added risks.
Glass Lewis, a proxy advisory firm, has recommended that Tesla shareholders vote against a proposed $56 billion pay package for CEO Elon Musk, which would become the largest CEO compensation in U.S. corporate history if approved.
In their report issued on Saturday, Glass Lewis highlighted several issues, including the "excessive size" of the compensation package, its potential dilutive impact, and the concentration of ownership it would cause. They also pointed to Musk's involvement in various demanding projects, especially his acquisition of Twitter, now renamed X, which adds to his substantial responsibilities.
The compensation plan was proposed by Tesla's board of directors, which has been criticized for its close relationship with Musk. The plan includes no salary or cash bonus but links rewards to Tesla's market value, which must reach $650 billion within ten years starting from 2018. Tesla's current market value is about $571.6 billion, according to LSEG data.
Advertisement
In January, Judge Kathaleen McCormick of Delaware's Court of Chancery invalidated the original pay package, prompting Musk to suggest moving Tesla's state of incorporation from Delaware to Texas. Glass Lewis criticized this proposal, indicating it presents "uncertain benefits and additional risk" for shareholders.
Despite this, Tesla has urged shareholders to reaffirm their approval of Musk's compensation. In a recent interview with the Financial Times, Tesla board chair Robyn Denholm defended the package, stating that Musk deserves the pay due to the company’s successful achievement of ambitious revenue and stock price targets.
Since becoming CEO in 2008, Musk has led significant improvements at Tesla, converting a $2.2 billion loss in 2018 into a $15 billion profit and increasing vehicle production sevenfold, according to the Vote Tesla campaign website.
Additionally, Glass Lewis has advised shareholders to vote against the reelection of board member Kimbal Musk, Elon Musk's brother, while endorsing the reelection of former 21st Century Fox CEO James Murdoch.
Also Read: Elon Musk's xAI Plans to Build Powerful Supercomputer for AI Chatbot Grok
