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Tesla Shareholders Urged To Vote Against Elon Musk’s Massive Pay

Elon Musk at Viva Technology

Proxy-advisory firm Glass Lewis has recommended Tesla shareholders vote against Elon Musk’s multibillion-dollar pay package.

In a detailed 71-page report, the company expressed concerns Musk's compensation—recently valued at $46 billion—might dilute existing shareholder stakes in Tesla.

This package would notably increase his share of ownership, positioning him as the largest shareholder "by a healthy margin."

The decision on Musk’s pay and other company matters, such as relocating Tesla’s incorporation to Texas—a move Glass Lewis also opposes—will be made at the shareholder meeting scheduled for June 13.

Recommendations from proxy advisers like Glass Lewis often sway shareholder votes since institutional shareholders use them for guidance.

Initially approved by Tesla shareholders in 2018, Musk’s compensation was later invalidated by a Delaware court in January due to procedural concerns.

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The court highlighted Musk’s “extensive ties” with board members.

It opted to revoke the previously approved package, once valued up to $55.8 billion.

"The excessive size of the award, both on a pure dollar basis and in terms of the dilutive effect upon exercise, remains very much top of mind"

Tesla reintroduced the compensation plan last month, structured as a 10-year stock option grant.

It has been actively campaigning for shareholder support in the upcoming vote.

Since 2018, Tesla’s market valuation has surged from about $50 billion to $570 billion.

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Proponents of the compensation terms argue that Musk has met key performance targets and merits the reward.

Musk does not draw a salary from Tesla.

However, he remains one of the wealthiest people in the world.

Most of his wealth is concentrated in his companies' shares.

His substantial compensation package has sparked controversy amid slowing sales and declining stock prices for the electric-vehicle company.

His pay plan was originally introduced in 2018, and was opposed by Glass Lewis at the time.

Its report says: "The excessive size of the award, both on a pure dollar basis and in terms of the dilutive effect upon exercise, remains very much top of mind.

"The company's explanations have done little to alleviate these concerns due to their significant scale."

For the compensation package to pass, it must receive majority approval from the voting shares, excluding Musk's approximate 13% stake and a smaller portion owned by his brother.

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