Tesla (TSLA) shareholders are being urged to reject a proposed $1 trillion U.S. pay package for CEO Elon Musk.
A coalition of unions and corporate watchdogs that includes the American Federation of Teachers and Public Citizen have launched a website called “Take Back Tesla.”
The website urges shareholders to vote against a plan, endorsed by Tesla’s board of directors, that would pay Musk $1 trillion U.S. worth of stock and expand his control over the electric vehicle maker.
Tesla’s board has said that the largest ever CEO pay package is necessary to lock-in Musk for a decade or longer and keep his focus on the company.
The plan is up for a shareholder vote at the company’s annual meeting in November of this year.
On the Take Back Tesla website, the coalition calls the outsized pay for Musk “outrageous,” especially after Musk’s “political activities have damaged Tesla’s brand” and hurt sales globally.
The campaign also notes that the pay plan doesn’t require Musk to focus more on Tesla, cease his political activities, or scale back his other business ventures that include social media company X and artificial intelligence (A.I.) startup xAI.
Leading shareholder proxy firms ISS and Glass Lewis have also recommended against authorizing the $1 trillion U.S. pay plan on similar grounds as the coalition.
The proxy firms note that Musk’s previous 2018 pay package of $56 billion U.S. in stock awards ended up in court and was struck down by a judge for not being in the best interest of Tesla shareholders.
The judge in the Delaware Court of Chancery noted in the ruling that Musk had controlled Tesla board members rather than negotiating with them over his compensation.
Tesla, whose electric vehicle sales have fallen more than 50% this year in some markets, is scheduled to report third-quarter financial results after markets close on Oct. 22.
TSLA stock has gained 16% this year and is currently trading at $442.60 U.S. per share.
Tech Insider
