A group of Tesla shareholders is requesting that investors cast their votes against CEO Elon Musk‘s more than $40 billion in remuneration, arguing that it is not in the best interests of the manufacturer of electric vehicles.
Falling worldwide sales, a decline in the market for electric vehicles, an ageing model portfolio, and a 30% decline in its stock price this year are all problems for Tesla.
In a letter to shareholders, the shareholder group—which also includes Amalgamated Bank, SOC Investment Group, and New York City Comptroller Brad Lander—stated that approving Musk’s compensation plan will not advance Tesla’s long-term stability and growth.
Concerns have also been raised about the possibility of lawsuits claiming that the compensation package is corporate waste if it is approved. Additionally, the letter stated that Musk is seen as Tesla’s part-time CEO and that he is spending more and more time on other business obligations.
“Shareholders should not pretend that this award has any kind of incentivizing effect—it does not. What it does have is an excessiveness problem, which has been glaringly apparent from the start,” the group said.
They mentioned that another plan might be proposed the next year if shareholders approve the remuneration package.
“Given Tesla’s history of exponentially larger awards, Musk may well ask for another award,” the group said.
Additionally, the organisation is urging investors to vote against the reelection of James Murdoch, a former CEO at Twenty-First Century Fox, and Elon Musk’s brother, Kimbal Musk, as board members.
Tesla urged shareholders last month to reinstate Musk’s pay package, which at the time was estimated to be worth $56 billion but was turned down earlier this year by a Delaware judge. It also requested at the time to move the corporate headquarters of the business to Texas.
At the annual meeting on June 13, stockholders will vote on the modifications.
In 2023, Tesla set a record with over 1.8 million electric vehicle deliveries globally. However, as EV sales have weakened this year, the value of the company’s shares has rapidly declined.
Tesla has slashed pricing on some models by up to $20,000 since last year. The price reductions reduced Tesla’s profit margins and led used electric vehicle prices to decline.
Tesla announced in April that it was letting go of 14,000 employees, or roughly 10% of its workforce.
ABC NEWS
