Tesla shareholder group is asking investors to vote against Musk’s compensation package

A group of Tesla shareholders has asked investors to vote against a more than $40 billion compensation package for CEO Elon Musk, saying it is not in the electric car maker’s best interest.

Tesla is struggling with declining global sales, slowing demand for electric vehicles, an aging model range, and a stock price that has fallen 30% this year.

The shareholder group, which includes New York City Comptroller Brad Lander, SOC Investment Group and Amalgamated Bank, said in a letter to shareholders that ratifying Musk’s pay package would do nothing to boost Tesla’s long-term growth and stability.

There are also concerns that approval of the pay package could spark lawsuits arguing it is corporate waste. Musk is viewed as a part-time CEO at Tesla, where he increasingly spends his time on other business commitments, the letter said.

“Contributors should not pretend that this award has any kind of incentive effect – it does not. What it suffers from is a problem of redundancy, which has been glaringly obvious from the beginning,” the group said.

They noted that if shareholders approve the compensation package, another plan could be introduced next year.

“Given Tesla’s history of receiving significantly larger awards, Musk may ask for another award,” the group said.

The group is also asking investors to vote against the re-election of board members Kimbal Musk, Elon’s brother, and James Murdoch, a former executive at media company Twenty-First Century Fox.

Last month Tesla He asked shareholders to restore Musk’s pay package, which was worth $56 billion at the time, which was previously rejected. Delaware judge this year. At that time, it also requested that the company’s headquarters be moved to Texas.

The changes will be voted on by shareholders at the annual meeting on June 13.

In a letter to shareholders issued in a regulatory filing last month, Chairman Robin Denholm said Musk had achieved the growth he was looking for in the automaker, with… Tesla Meet all equity value and operational targets in the 2018 package that were approved by shareholders. Shares have then risen 571% since the pay package began.

“Because the Delaware court disagreed, Elon was not compensated for any of his work for Tesla over the past six years, which helped create significant growth and shareholder value,” Denholm wrote. “This strikes us — and many of the shareholders we have already heard from — as fundamentally unfair, and inconsistent with the will of the shareholders who voted for it.”

The story continues

Tesla posted record deliveries of more than 1.8 million electric cars worldwide in 2023, but the value of its shares has eroded rapidly this year as… Electric car sales are declining.

the a company It said it delivered 386,810 vehicles from January to March, about 9% fewer than it sold in the same period last year. Future growth is in doubt and it may be difficult to convince shareholders to support a large pay package in an increasingly competitive environment around the world.

Starting last year, Tesla did just that Prices reduced by $20,000 On some models. Price cuts caused the value of used electric cars to decline and squeezed Tesla’s profit margins.

In April, Tesla said so It was letting about 10% of its workers goabout 14,000 people.