Tesla shareholders made waves against Musk's sky-high compensation plan

Global Tech

2024-05-21 10:15Published in Beijing

On May 21, according to foreign media reports, a group of Tesla shareholders called on investors to vote against Elon Musk's $46 billion (about 332.7 billion yuan) sky-high compensation plan at the shareholders' meeting, including New York City Comptroller Brad Rand.

It is understood that the New York City Comptroller Brad Rand and other heavyweights. In a letter to Tesla's other shareholders, they made clear their concerns about the company's board of directors being too close to Musk and arguing that the board failed to properly evaluate Musk's compensation package. The letter directly called on shareholders to reject the re-election of Kimbar Musk and James Murdoch to Tesla's directors, citing their particularly close personal relationship with Musk.

They also said in the letter that Tesla's board of directors are all allies of Musk. Although Musk has divided his time among the companies he leads, Tesla's board of directors has not properly held him accountable. The letter said that Kimbal, Musk's younger brother, had served on the board for 20 years, and that Murdoch was his personal friend.

Tesla will hold a shareholder meeting on June 13. At that time, Tesla shareholders will vote on Musk's compensation package and other proposals, including moving the company to Texas. It is understood that Tesla's salary turmoil began in 2018, when the company proposed and approved Musk's salary plan of up to $55 billion. However, in January, a Delaware court ruled that the compensation package was misleading and withdrew it for failing to comply with public company regulations. Still, Tesla plans to resubmit the compensation package at its shareholder meeting on June 13 in the hope of getting shareholder approval.

At the heart of this wave of opposition is the belief that Tesla's board is too reliant on Musk to effectively oversee his compensation package. They are concerned that this "one-word" approach to governance will adversely affect the company's long-term development. At the same time, shareholders have also questioned whether Musk still has enough energy to lead Tesla in the face of multiple challenges for the company.

It is worth noting that Leo KoGuan, one of Tesla's largest individual shareholders, also publicly criticized Musk's compensation package on social media, calling it a "robbery". KoGuan said that Musk, who has been selling shares for the past few years, has asked for more voting control in the current compensation package vote, which is difficult for shareholders to accept.

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