A group of Tesla shareholders is urging investors to vote against Elon Musk’s $46 billion pay package.
The move comes amid concerns about slowing vehicle sales and declining share prices for the electric vehicle maker.
The group, led by New York City Comptroller Brad Lander, sent a letter to fellow Tesla shareholders on Monday.
They advocate for the rejection of Musk’s pay package and the re-election of two board members.
The shareholders argue the board is too closely aligned with Musk and failed to assess the compensation package adequately.
Shareholders are scheduled to vote on June 13 regarding Musk’s pay package and other proposals.
This includes the potential relocation of the company’s incorporation to Texas.
Although shareholders initially approved Musk’s compensation in 2018, a Delaware court nullified the decision in January due to concerns about the approval process.
Tesla has re-proposed the pay package in its proxy filing and is working to persuade shareholders to back the measure.
“Even as Tesla’s performance is floundering, the board has yet to ensure that Tesla has a full-time CEO who is adequately focused on the long-term sustainable success of our company”
The company contends that Musk deserved the compensation by meeting targets related to Tesla’s share price and operations set in 2018.
However, some shareholders are worried about the board’s independence and Musk’s dominant presence.
The row comes as Tesla grapples with reduced demand for electric vehicles and increased competition.
The shareholder group asserts Tesla’s board is filled with Musk’s allies and has not properly held him accountable, mainly as he divides his attention among multiple ventures.
They also say Musk’s use of Tesla stock as collateral for other endeavors poses an unnecessary risk to shareholders.
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The group wrote: “Even as Tesla’s performance is floundering, the board has yet to ensure that Tesla has a full-time CEO who is adequately focused on the long-term sustainable success of our company.”
The letter also calls for rejecting Kimbal Musk and James Murdoch’s re-election, citing their close personal ties to Elon Musk.
Kimbal Musk, Elon’s brother, has been on the board for two decades, while Murdoch is described as a personal friend.
The shareholder group includes SOC Investment Group, union-owned Amalgamated Bank, United Church Funds, Nordea Asset Management, and AkademikerPension, a Danish pension fund.
The combined stake of this group in Tesla is not immediately known.
Lander, a Democrat elected in 2021, oversees New York City’s public pension funds as the NYC Comptroller.
