Additional Coverage:
- Another Tesla shareholder came out against Elon Musk’s multibillion-dollar pay package, saying the billionaire should ‘focus on going to Mars’ (newsbreak.com)
Tesla’s Elon Musk faces growing dissent over his significant compensation package, with notable opposition from key investors, including the California State Teachers’ Retirement System (CalSTRS). CalSTRS’ Chief Investment Officer, Christopher Ailman, voiced his disagreement in a CNBC interview, critiquing the package valued at billions. With a vote on the package looming at Tesla’s upcoming shareholder meeting, investors express concerns over its fairness and Musk’s focus on the company amidst his other ventures.
The compensation package, initially estimated at $56 billion in 2018, has slightly decreased in value to about $46 billion. However, Ailman and other investors deem it excessive, advocating for a more reasonable salary that would still significantly reward Musk compared to the average worker. A Delaware judge previously invalidated the package, citing concerns over its fairness and the decision-making process.
CalSTRS, holding 4.6 million Tesla shares, stands firm in its stance despite Musk’s pivotal role in Tesla’s success. Ailman acknowledges Musk’s achievements but suggests that Tesla might benefit from more traditional management to ensure its focus remains on its core car manufacturing business. Despite other ventures, Tesla’s primary identity as a car manufacturer should be reflected in its output and stock valuation, which Ailman argues is currently overestimated.
Investor sentiment appears to lean towards rejecting the pay package, with concerns amplified by Musk’s management decisions, including the reallocation of Nvidia chips meant for Tesla. However, CalSTRS remains committed to holding its shares in Tesla, looking towards the future with or without Musk’s direct leadership of the company.
The investor vote’s outcome, set to be revealed on Thursday, holds significant implications for Tesla’s stock price and governance. Analysts predict a likely rejection of Musk’s compensation agreement, influenced by proxy advisor recommendations and institutional investors’ stated opposition. The decision underscores broader concerns about executive compensation, corporate governance, and Musk’s ambitious pursuits beyond Tesla.