Tesla Faces Shareholder Backlash Over Elon Musk's Compensation Package
Tesla faces shareholder backlash over Elon Musk's proposed compensation package. New York State Comptroller Thomas P. DiNapoli, representing the state's retirement fund, and other investors have publicly opposed the plan, citing concerns about the company's board independence and Musk's excessive pay.
Tesla's board recently outlined a proposal that could grant Musk an additional 12% stake in the company if he meets certain performance goals. However, a group of investors and state officials, including those from Nevada, New Mexico, Connecticut, Massachusetts, Colorado, Maryland, and New York City, have urged shareholders to vote against this package. They argue that Tesla's board, with its close ties to Musk, lacks independence and has failed to align his compensation with shareholder value.
In a letter sent on Thursday, the signatories accused Tesla's board of harming the company's reputation in their pursuit of retaining Musk. They pointed to Tesla's volatile operational and financial performance in the last annual meeting, suggesting that the proposed pay package does not reflect these challenges. Tesla responded, stating that the package aligns Musk's compensation with shareholder value creation.
The vote against Musk's proposed compensation package is expected to be a close one, with significant implications for Tesla's future. The state officials and investors hope that their stance will encourage Tesla's board to adopt more shareholder-friendly policies and improve the company's governance.
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