(Reuters) – Proxy consulting firm Glass Lewis said on Saturday it had called on Tesla (NASDAQ:) shareholders to reject CEO Elon Musk’s $56 billion pay package, which if passed would be the largest pay package for a CEO in a corporate America. .
The report cited reasons such as the “excessive size” of the payroll deal, the dilutive effect of performance obligations and concentration of ownership. It also mentions Musk’s “list of extremely time-consuming projects” that has expanded since his high-profile purchase of Twitter, now known as X.
The salary package was proposed by Tesla’s board of directors, which has repeatedly faced criticism due to its close ties to the billionaire. The package does not include salary or cash bonuses, and the compensation is based on the assumption that Tesla’s market value will increase to $650 billion over 10 years, starting in 2018. The company is currently valued at approximately $571.6 billion, according to LSEG.
In January, Judge Katelyn McCormick (NYSE:) of the Delaware Chancery Court vacated the original salary package. Musk then tried to move Tesla’s state of registration from Delaware to Texas.
Glass Lewis also criticized the proposed move to Texas as offering shareholders “uncertain benefits and additional risk.”
Tesla called on shareholders to confirm their approval of the compensation.
In an interview this month, Tesla Chairman Robin Denholm told the Financial Times that Musk deserves the pay package because the company has achieved ambitious revenue and share price targets.
Musk became CEO of Tesla in 2008. It has helped improve results in recent years, with the company posting a $15 billion profit from a $2.2 billion loss in 2018 and producing seven times as many vehicles, according to Vote Tesla, an online campaign. .
The proxy adviser also recommended that shareholders vote against the re-election of board member Kimbal Musk, the billionaire’s brother, while former 21st Century Fox CEO James Murdoch was recommended for re-election.