Reject $56 Billion Pay Package for Elon Musk, Urges Proxy Advisor

Tesla shareholders were advised to reject the $56 billion pay package for Elon Musk, CEO of the company, by proxy advisory firm Glass Lewis. Such a recommendation followed concerns over the deal’s “excessive size” and its potentially dilutive effect. Moreover, Glass Lewis pointed out that Musk is working on a number of high-demanding projects, such as the recent deal for Twitter, now called X.

The pay package was proposed by Tesla’s board of directors. Critics often cast doubt on their close ties with Musk. The package has no salary or cash bonus but offers rewards if Tesla’s market value hits $650 billion in ten years from 2018. At the moment, Tesla’s market value is around $571.6 billion.

Delaware’s Court of Chancery Judge Kathaleen McCormick nullified the original pay package this January. Shortly after that, Musk made attempts to shift Tesla’s state of incorporation from Delaware to Texas. However, Glass Lewis criticized the proposed move as having “uncertain benefits and additional risk” for shareholders.