Tesla shareholders recommended rejecting Musk’s $56 billion reward

(Reuters) – Proxy consultancy Glass Lewis said on Saturday it has urged Tesla shareholders to reject a $56 billion pay package for CEO Elon Musk that, if passed, would be the largest pay package for a CEO in corporate America.

The report cited reasons such as the “excessive size” of the wage agreement, its dilutive effect on practice and its concentration of ownership. It also noted Musk’s “series of extremely time-consuming projects” that have expanded with his high-profile purchase of Twitter, now known as X.

The pay package was proposed by Tesla’s board of directors, which has repeatedly come under fire for its close ties to the billionaire. The package includes no salary or cash bonus and sets rewards based on Tesla’s market value, which could reach as much as $650 billion in the decade from 2018. The company is currently valued at about $571.6 billion, according to LSEG data.

In January, Judge Kathaleen McCormick of the Court of Chancery in Delaware overturned the original pay package. Musk then attempted to move Tesla’s state of incorporation from Delaware to Texas.

Glass Lewis also criticized the proposed move to Texas as offering “uncertain benefits and additional risks” to shareholders.

Tesla has urged shareholders to reaffirm their approval of the compensation.

In an interview this month, Tesla’s chairman Robyn Denholm told the Financial Times that Musk deserves the pay package because the company has achieved ambitious revenue and share price targets.

Musk became CEO of Tesla in 2008. In recent years, he has helped improve results, helping the company post a $15 billion profit from a $2.2 billion loss in 2018 and produce seven times more vehicles, according to a online campaign website, Vote Tesla. .

The proxy adviser also recommended that shareholders vote against the re-election of board member Kimbal Musk, the billionaire’s brother, while recommending the re-election of former 21st Century Fox CEO James Murdoch.

(Reporting by Urvi Dugar in Bengaluru; Editing by David Gregorio)