Tesla is facing increased opposition to CEO Elon Musk’s substantial $US1 trillion ($1.54 trillion) compensation package. Another major proxy advisor, Glass Lewis & Co., is urging shareholders to vote against the plan, potentially creating further obstacles for the carmaker’s board as it seeks investor approval. Tesla designs, develops, manufactures, leases, and sells electric vehicles, and generates revenue through energy generation and storage systems. The company is at the forefront of sustainable energy and electric vehicle technology.
Glass Lewis & Co. cited potential dilution to shareholders and other terms of the proposed pay arrangement as reasons for “significant concern.” This recommendation was included in voter guidance issued prior to Tesla’s annual shareholders meeting scheduled for November 6. The report aligns with similar recommendations from Institutional Shareholder Services, another proxy firm, which has also advised shareholders to reject the pay plan.
Proxy advisors often hold considerable influence over shareholders, particularly large institutions that invest in passive funds. Both Glass Lewis & Co. and Institutional Shareholder Services had previously recommended against Musk’s 2018 pay deal; however, approximately three-quarters of investors ultimately supported the plan.
Tesla has responded to the Glass Lewis recommendation, branding it as “misguided.” In a statement posted on X (formerly Twitter) on Monday, Tesla argued that Glass Lewis is disregarding prior shareholder votes that were in favour of Musk’s compensation.
