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

Elon Musk’s astro­nom­i­cal $46 bil­lion pay pack­age as Tes­la’s CEO is in seri­ous jeop­ardy, as share­hold­ers are being urged to reject the deal by a promi­nent proxy advi­so­ry firm.

The proxy advi­so­ry firm Glass Lewis has pro­duced a 71-page report out­lin­ing var­i­ous rea­sons why share­hold­ers should vote against Musk’s pro­posed com­pen­sa­tion pack­age. They have cit­ed con­cerns over the “exces­sive size” of the pay deal, as well as the poten­tial dilu­tion it could cause to exist­ing share­hold­er holdings.

Glass Lewis also raised con­cerns about Musk’s “slate of extra­or­di­nar­i­ly time-con­sum­ing projects”, which have expand­ed with his high-pro­file pur­chase of Twit­ter, now known as X. They argue this could dis­tract the CEO from focus­ing on Tesla.

The pay pack­age was pro­posed by Tes­la’s board of direc­tors, which has repeat­ed­ly faced crit­i­cism for its close ties to the bil­lion­aire 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 Jan­u­ary, a Delaware judge had pre­vi­ous­ly void­ed the orig­i­nal pay pack­age, cit­ing Musk’s “exten­sive ties” with board members. 

Now, Glass Lewis is advis­ing share­hold­ers to reject the re-pro­posed com­pen­sa­tion deal, as well as the plan to move Tes­la’s state of incor­po­ra­tion from Delaware to Texas, which they say offers “uncer­tain ben­e­fits and addi­tion­al risk” to investors.