New York City, New York – Tesla investors are actively opposing Elon Musk’s proposed $46 billion stock-option package, marking the largest compensation plan in history. The New York City pension funds, which oversee $260 billion in assets, have filed a notice urging shareholders to vote against Musk’s pay plan at the upcoming shareholder meeting on June 13. The move is led by New York City Comptroller Brad Lander, who believes that the Tesla board is excessively reliant on Musk and has failed to address his divided focus among various companies, including SpaceX, Neuralink, and the Boring Company.
According to the investors, Musk’s involvement in other ventures, such as poaching engineers from Tesla’s AI and autonomy team for his new company xAI, poses a threat to Tesla’s stability and performance. They argue that Musk’s part-time commitment to Tesla undermines the company’s potential for growth and innovation. The investors are concerned that Musk’s allocation of Tesla stock as collateral for personal loans may lead to a significant drop in stock value if he is forced to sell his pledged shares.
On the other hand, supporters of Musk’s pay plan, including individual retail investors, view him as a visionary leader essential to Tesla’s success. Musk has garnered support through social media engagement, encouraging shareholders to vote in favor of his compensation package. The Tesla board defends Musk’s pay plan, highlighting his past achievements in significantly increasing revenues and turning the company profitable.
However, dissident investors, such as Amalgamated Bank and SOC Investment Group, raise concerns about Musk’s use of Tesla resources for personal projects and the company’s underperformance compared to industry peers. While Tesla’s board emphasizes Musk’s success in achieving ambitious targets in the past, critics question the long-term sustainability of the proposed pay plan given the company’s current challenges.
In addition to the compensation issue, Tesla is also seeking shareholder approval to move its incorporation from Delaware to Texas. This move is believed to be motivated by a recent court ruling in Delaware regarding Musk’s pay plan. The dissident investor group is not only targeting Musk’s compensation but also calling for support to withhold from Musk’s brother, Kimbal Musk, and former 21st Century Fox CEO James Murdoch, who they believe lack independence on the Tesla board.
As the shareholder meeting approaches, the battle over Elon Musk’s compensation plan underscores the divergent viewpoints within Tesla’s investor base, with significant implications for the company’s future trajectory and leadership stability.