Tesla Shareholders Oppose Elon Musk Pay Package, Say CEO Lacks Strong Leadership for Being Busy to Other Businesses

By Madz Dizon

May 21, 2024 11:46 PM EDT

Tesla Shareholders Oppose Elon Musk Pay Package, Say CEO Lacks Strong Leadership for Being Busy to Other Businesses
Tesla CEO Elon Musk is pictured as he attends the start of the production at Tesla's "Gigafactory" on March 22, 2022 in Gruenheide, southeast of Berlin.
(Photo : PATRICK PLEUL/POOL/AFP via Getty Images)

A group of Tesla investors is urging fellow board members to reject CEO Elon Musk's $56 billion compensation plan once more.

A group of eight signatories, which includes Amalgamated Bank and SOC Investment Group, expressed concerns to other shareholders on Monday regarding the lack of strong leadership at Tesla due to Elon Musk's other business commitments.

Elon Musk's Pay Package Faces Backlash from Tesla Shareholders

Tesla is facing challenges with declining global sales, a decrease in demand for electric vehicles, an outdated model lineup, and a significant drop in its stock price, which has fallen by 30% this year. 

In a letter to shareholders, the shareholder group  expressed their belief that approving Elon Musk's pay package would not contribute to Tesla's long-term growth and stability.

There is also a growing concern that the approval of the pay package may result in legal action, with claims that it constitutes corporate waste. According to the letter, it is stated that Musk is seen as a CEO who dedicates only part of his time to Tesla, as he is increasingly occupied with other business commitments. 

According to Fortune, the group is also urging investors to vote against the reelection of board members Kimbal Musk, who is Elon's brother, and James Murdoch, a former executive at media company Twenty-First Century Fox.

READ NEXT: Donald Trump Accepts Cryptocurrency Donations, Vows to Establish 'Crypto Army' 

Tesla Chairperson Still Satisfied With Elon Musk

Last month, Tesla made a request to its shareholders to reinstate Musk's pay package, which had a value of $56 billion at that time.

However, a Delaware judge had previously rejected this request earlier this year. Additionally, it requested a relocation of the company's corporate headquarters to Texas.

The proposed changes are set to be voted on by stockholders during the upcoming annual meeting on June 13, as per AP News.

In a recent letter to shareholders, Chairperson Robyn Denholm expressed satisfaction with Musk's performance at the automaker.

Denholm stated that Tesla has successfully achieved the growth and met all the stock value and operational targets outlined in the 2018 package approved by shareholders. Shares had surged 571% since the pay package was implemented.

READ MORE: Electric Vehicles Are Three Times More Likely to Hit Urban Pedestrians Than Fuel Cars, Study Reveals 

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