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A group of Tesla shareholders is calling on fellow investors to vote against CEO Elon Musk’s $56 billion pay package, citing concerns over his distracting commitments to other companies and the automaker’s underperformance.that in a letter addressed to shareholders on Monday, a coalition led by Amalgamated Bank and SOC Investment Group, along with six other signatories, argued that Musk’s involvement in five other companies he controls is detrimental to Tesla’s best interests.
Elon Musk, chairman and chief executive officer of Tesla Motors, center, participates in the opening bell ceremony at the Nasdaq Marketsite with his twin boys Griffin, green shirt at center, and Xavier, right in blue shirt, and his fiancee Talulah Riley, second from right, in New York, U.S., on Tuesday, June 29, 2010. Tesla Motors Inc.
The shareholders’ letter stated, “Tesla is suffering from a material governance failure which requires our urgent attention and action.” This plea comes as Tesla’s board is asking investors to approve Musk’s pay package for a second time, following a Delaware judge’s decision toMusk’s pay package, initially approved by shareholders in 2018, granted him equity awards as Tesla achieved certain market capitalization and operational targets.
The shareholder group expressed concerns about Musk’s numerous commitments, noting that many of the signatories had published a separate open letter to Tesla’s board more than a year ago, seeking a meeting with board chair Robyn Denholm, which went unanswered.
The shareholders wrote, “If this was one of the primary reasons for the 2018 pay package, then it has been an abysmal failure, as six years later Musk’s outside business commitments have only increased.” They also pointed out that Musk founded another startup last year, xAI, which has hired away artificial intelligence specialists from Tesla.
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