Elon Musk’s $46 Billion Tesla Pay Package Faces Shareholder Revolt

Elon Musk's $46 Billion Tesla Pay Package Faces Shareholder Revolt
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Elon Musk‚Äôs astro¬≠nom¬≠i¬≠cal $46 bil¬≠lion pay pack¬≠age as Tes¬≠la‚Äôs CEO is in seri¬≠ous jeop¬≠ardy, as share¬≠hold¬≠ers are being urged to reject the deal by a promi¬≠nent proxy advi¬≠so¬≠ry firm.

The proxy advi¬≠so¬≠ry firm Glass Lewis has pro¬≠duced a 71-page report out¬≠lin¬≠ing var¬≠i¬≠ous rea¬≠sons why share¬≠hold¬≠ers should vote against Musk‚Äôs pro¬≠posed com¬≠pen¬≠sa¬≠tion pack¬≠age. They have cit¬≠ed con¬≠cerns over the ‚Äúexces¬≠sive size‚ÄĚ of the pay deal, as well as the poten¬≠tial dilu¬≠tion it could cause to exist¬≠ing share¬≠hold¬≠er holdings.

Glass Lewis also raised con¬≠cerns about Musk‚Äôs ‚Äúslate of extra¬≠or¬≠di¬≠nar¬≠i¬≠ly time-con¬≠sum¬≠ing projects‚ÄĚ, which have expand¬≠ed with his high-pro¬≠file pur¬≠chase of Twit¬≠ter, now known as X. They argue this could dis¬≠tract the CEO from focus¬≠ing on Tesla.

The pay pack¬≠age was pro¬≠posed by Tes¬≠la‚Äôs board of direc¬≠tors, which has repeat¬≠ed¬≠ly faced crit¬≠i¬≠cism for its close ties to the bil¬≠lion¬≠aire CEO. 

The pack­age does not pro­vide Musk with a salary or cash bonus, but rather sets rewards based on Tes­la’s mar­ket val­ue ris­ing from $50 bil­lion to as much as $650 bil­lion over a 10-year period.

In Jan¬≠u¬≠ary, a Delaware judge had pre¬≠vi¬≠ous¬≠ly void¬≠ed the orig¬≠i¬≠nal pay pack¬≠age, cit¬≠ing Musk‚Äôs ‚Äúexten¬≠sive ties‚ÄĚ with board members. 

Now, Glass Lewis is advis¬≠ing share¬≠hold¬≠ers to reject the re-pro¬≠posed com¬≠pen¬≠sa¬≠tion deal, as well as the plan to move Tes¬≠la‚Äôs state of incor¬≠po¬≠ra¬≠tion from Delaware to Texas, which they say offers ‚Äúuncer¬≠tain ben¬≠e¬≠fits and addi¬≠tion¬≠al risk‚ÄĚ to investors.

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