Tesla Defends Musk's $56 Billion Pay Package Following 'Excessive' Remarks from Shareholders

By Thea Felicity

Jun 03, 2024 12:30 PM EDT

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Tesla CEO Elon Musk gets back into his Tesla after talking to media before visiting the construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin.
(Photo : ODD ANDERSEN/AFP via Getty Images)

Tesla stands firm in support of CEO Elon Musk's $56 billion pay package. Reuters reported that the company argues that it incentivizes Musk to generate significant value for shareholders. This comes after a top proxy advisory firm and Institutional Shareholder Services (ISS) advised shareholders to vote against the proposal before Tesla's annual meeting on June 13.

Glass Lewis and ISS labeled the pay package "excessive" and raised concerns about Tesla's offering shareholders an "all-or-nothing" option. 

However, Tesla contends that the compensation, approved by shareholders in 2018, is tied to the company's market value and operational achievements.

READ MORE: Proxy Advisory Firm Wants Tesla Shareholders to Reject Elon Musk's $56 Billion Pay Package

Tesla on Elon Musk's $56 Billion Pay Package

Despite a Delaware judge voiding the compensation plan in January, Tesla is pushing forward with its defense, emphasizing that a new pay package would be more costly for shareholders. 

According to Tesla, honoring the original agreement is essential, as Musk has already fulfilled his obligations. Additionally, the company maintains that ISS's recommendation is based on a "technical misunderstanding" and fails to acknowledge Tesla's strong performance under Musk's leadership.

Elon Musk has yet to respond to Glass Lewis and ISS' remarks.

READ NEXT: Tesla CEO Elon Musk Faces Insider Trading Allegations After $7.5 Billion Share Sale

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