Tesla shareholders should reject CEO Elon Musk's proposed $56 billion compensation package, proxy advisory firm Glass Lewis said. Tesla stock fell slightly.
Glass Lewis said in a report released Saturday that the pay deal is "excessive" and cited the "dilutive impact" on current shareholders. Investors first approved the pay deal back in 2018, but a Delaware court struck it down earlier this year, saying shareholders weren't adequately informed.
Elon Musk has hinted he could develop artificial intelligence and robotics outside of Tesla if he doesn't get the pay deal reinstated, plus further compensation to give him 25% voting control. His XAI startup has already hired away a number of Tesla staff.
Glass Lewis also opposed Tesla's proposal to reincorporate in Texas from Delaware. It also opposed the re-electing Kimbal Musk, Elon's brother, to the Tesla board, saying he's not independent enough.
Fellow proxy advisory firm Institutional Shareholder Services has not weighed in on Elon Musk's pay deal or reincorporating in Texas. Back in 2018, ISS recommended voting no on pay deal.
Shareholder advisory firms could have some sway with institutional investors, which hold a major bigger share of Tesla stock than they did in 2018.
Tesla holds its annual shareholder meeting on June 13. The pay deal requires majority support of those voting, excluding those of Elon and Kimbal Musk. The move to Texas requires a majority of shares outstanding, with uncast votes counted as "no" votes.
Even if Tesla shareholders approve the pay deal, it's possible the Delaware court could still block it.
Tesla Stock
Shares fell 1.4% to 176.75 on Tuesday. Tesla stock rose 1% last week to 179.24, modestly above the 50-day line. TSLA stock is down 27.8% so far in 2024.
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