DBT Bureau
Bengaluru, 21 May
A group of Tesla shareholders have asked the electric vehicle maker’s investors to vote against the compensation package of CEO Elon Musk, which is more than $40 billion.
According to a report by the Associated Press, these shareholders have pleaded that such high compensation is not in the car maker’s best interest at a time when Tesla is struggling with falling global sales, slowing electric vehicle demand, and an aging model lineup.
Tesla’s share price has fallen by around 27% so far this year amid slowing growth. The company undertook job cuts in recent months to optimise its costs.
The shareholder group, which includes New York City Comptroller Brad Lander, SOC Investment Group, and Amalgamated Bank, said in a letter to shareholders that ratification of Musk’s pay package would do nothing to promote Tesla’s long-term growth and stability, the report said.
“Shareholders should not pretend that this award has any kind of incentivizing effect-it does not. What it does have is an excessiveness problem, which has been glaringly apparent from the start,” the group said.
Last month Tesla asked its shareholders to restore Musk’s pay package, which was valued at $56 billion at the time. However, it was rejected by a Delaware judge this year. It also asked to shift the company’s corporate home to Texas. These proposals will be voted on by stockholders at a June 13 annual meeting.
Tesla is facing the heat owing to falling demand and competition from cheaper Chinese imports. The company reported revenues of $21.3 billion in the first quarter of 2024.
