Tesla shareholders urge investors to vote against Musk’s proposed compensation package

A group of Tesla shareholders is urging investors to vote against a massive $40 billion compensation package for CEO Elon Musk, citing concerns about the electric vehicle maker’s future. The shareholders, including New York City Comptroller Brad Lander, SOC Investment Group, and Amalgamated Bank, believe that ratifying Musk’s pay package will not benefit Tesla’s long-term growth and stability.

The group expressed worries that approving the compensation package could lead to potential lawsuits arguing corporate waste, as Musk is seen as a part-time CEO with increasing commitments elsewhere. They emphasized that the excessive nature of the award is evident from the start and could set a precedent for even larger awards in the future.

In addition to voting against Musk’s compensation, the shareholder group is also urging investors to reject the reelection of board members Kimbal Musk and James Murdoch. Last month, Tesla asked shareholders to reinstate Musk’s pay package, which was previously rejected by a Delaware judge, and to relocate the company’s corporate headquarters to Texas.

Despite posting record deliveries of over 1.8 million electric vehicles in 2023, Tesla’s stock value has plummeted this year due to softening EV sales. The company recently reported a nearly 9% decrease in vehicle deliveries from January to March compared to the same period last year, raising doubts about future growth and shareholder support for lavish pay packages in a competitive market.

With Tesla slashing prices and cutting its workforce by about 10% in April, the company faces challenges in maintaining profitability and investor confidence amidst increasing global competition in the EV industry. The fate of Musk’s compensation package and the company’s future direction will be decided at the upcoming annual meeting on June 13.