A coalition of Tesla shareholders and some state officials is requesting investors to oppose Elon Musk’s 1 trillion compensation package when it goes before the company’s November meeting. The group includes SOC Investment Group and state treasurers for Nevada, New Mexico and Connecticut. They wrote a letter on Thursday to Tesla shareholders that called for denying the pay plan. The group also wishes that investors vote against re-electing three board directors, Ira Ehrenpreis, Joe Gebbia and Kathleen Wilson-Thompson.
Why Shareholders Are Battling the Pay Package
The coalition argues that the Tesla board has been too busy making Musk happy, and this has slowed efforts on significant objectives since last year’s annual meeting. They cited sagging business performance and said the board has not properly overseen management. One of the state officials who is against the package is New York City Comptroller Brad Lander, one of Tesla’s board’s longtime critics. While New York City pension funds are not among the largest Tesla shareholders, Lander has been a party to many reform campaigns at shareholder meetings.
The board of Tesla last month suggested what they term the largest corporate compensation package in history for Musk. The proposal has extremely aggressive performance goals and aims to satisfy Musk’s demand for greater control over the company. Tesla announced record quarterly deliveries on Thursday, but faces concern that the expiration of the US electric vehicle tax credit will curb sales rapidly. The recent news indicates increasing worry among investors regarding how Tesla is operated and whether such a huge compensation package is justified.
Tesla Defends the Compensation Plan
Tesla pushed back against the shareholder letter by announcing on X that the performance plan connects Musk’s compensation to generating trillions of dollars in value for shareholders. The company asserted that if Musk doesn’t perform, he receives nothing from the deal. Tesla maintains that the pay is justified because it hinges solely on achieving challenging targets. The board feels that retaining Musk, engaged and committed to Tesla, is worth the enormous compensation package.
Critics argue that the board is too accommodating to give Musk whatever he demands without adequate checks and balances. The shareholder group wants the board to be more independent and prioritise long-term company well-being over simply placating the CEO. Brad Lander’s term as New York City Comptroller expires on January 1, 2026, but he is not done advocating for reforms at Tesla and other large companies. The vote in November will determine if ordinary investors align with the grievances of this coalition or believe Tesla’s board.
News At Glance
- Shareholders and state authorities urge a vote against Musk’s 1 trillion compensation package
- Board is too obsessed with keeping Musk rather than company performance, says coalition
- The group also seeks the rejection of three Tesla board members who stand for re-election
- Tesla justifies its plan, stating Musk is only compensated if he brings trillions in shareholder value
- Vote at Nov. annual meeting will determine fate of record compensation package
FAQs
- How much is Elon Musk’s proposed Tesla compensation package worth?
The compensation package is worth 1 trillion dollars and would be the largest ever corporate compensation package.
- Who is against Musk’s compensation package?
A group of Tesla investors, including Nevada, New Mexico, Connecticut and New York City Comptroller Brad Lander, state treasurers.
- When will Musk’s pay package be voted on by the shareholders?
The vote will be at Tesla’s annual meeting in November 2025.
- What does Tesla have to say regarding the pay package?
Tesla believes the plan puts Musk’s pay at risk of being zero if there are no results, and he gets nothing without achievements.
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