A shareholder battle is brewing over the proposed $1 trillion U.S. pay package being offered to Tesla (TSLA) CEO Elon Musk.
Major Tesla shareholders, led by the New York City employee pension fund, are urging their fellow stockholders to reject both the re-election of Tesla’s board of directors and the proposed $1 trillion U.S. pay for Musk.
“The Board’s relentless pursuit of retaining its CEO seems to have harmed the Company’s reputation, led to extraordinarily high levels of executive compensation, and delayed progress on meeting key goals like full self-driving,” reads a letter filed with the U.S. Securities and Exchange Commission (SEC) by the New York City pension fund.
The letter goes on to state: “We are concerned that the Board remains fixated on pleasing Mr. Musk, rather than responsibly addressing his many varied pursuits, at least some of which have come at the expense of Tesla shareholders.”
The letter filed with the SEC was co-signed by the state treasurers of Nevada, Massachusetts, Connecticut, Colorado, Vermont, and New Mexico, as well as the Maryland state comptroller and American Federation of Teachers.
Tesla’s board of directors proposed the $1 trillion U.S. pay package last month in a bid to keep Musk committed to the electric vehicle maker and focused on the company.
The $1 trillion U.S. compensation would be given to Musk provided certain milestones at Tesla are met in coming years. However, analysts have called the proposed pay “exorbitant” and “outrageous.”
A previous pay package of $56 billion U.S. that was given to Musk in 2018 is tied up in court after shareholders filed lawsuits to block it, claiming it is not in their best interests.
The ongoing battle over Musk’s compensation comes as he seeks greater control over Tesla. Elon Musk is already the world’s richest person with a net worth of $459 billion U.S.
The letter filed with the SEC states that Tesla is “in dire need of truly independent directors who will advocate for shareholder interests over the personal interests of the CEO.”
The annual meeting where shareholders will vote on both Musk’s pay package and Tesla’s board members is scheduled for Nov. 6 of this year.
TSLA stock is up 15% in 2025 and trading at $436 U.S. per share.
Tech Insider
