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Elon Musk’s $46 billion Tesla pay package is in jeopardy as shareholders are tipped to vote against his compensation and plans to move the electric vehicle maker to Texas.


Tesla shareholders are being urged to reject a $46 billion pay package for CEO Elon Musk that, if approved, would be the largest compensation package for a CEO in corporate America.

Over the weekend, consultancy Glass Lewis produced a 71-page report that cites various reasons including the «excessive size» of the payout.

Glass Lewis also noted how Musk’s proposed compensation could also dilute existing shareholders’ stakes in Tesla.

The report also sparked concern by mentioning Musk’s «collection of extraordinarily time-consuming projects» expanded by his high-profile purchase of Twitter, now known as X.

Tesla shareholders urged to reject Elon Musk’s $46 billion pay package

The pay package was designed by Tesla’s board, which has repeatedly come under fire for its close ties to the billionaire.

The package doesn’t give Musk a salary or cash bonus, but sets rewards based on Tesla’s market value, which will increase from $50 billion to $650 billion over 10 years from 2018.

The company is currently valued at about $571.6 billion, according to LSEG data.

In January, Judge Kathaleen McCormick of Delaware’s Court of Chancery struck down the original pay package, which was originally approved in 2018.

In the ruling, Judge McCormick cited Musk’s «extensive ties» to board members and agreed to cancel the package, which was once valued at up to $55.8 billion.

The package proposed by Tesla's board rewards Musk based on Tesla's market value

The package proposed by Tesla’s board rewards Musk based on Tesla’s market value

There are also concerns about Musk's

There are also concerns about Musk’s «extraordinarily time-consuming project» that expanded with his high-profile purchase of Twitter, now known as X.

Musk then sought to move Tesla’s state of incorporation to Texas from Delaware.

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Glass Lewis also criticized the proposed move to Texas as offering «uncertain benefits and additional risk» to shareholders.

The recommendations of proxy advisors can influence how shareholders vote because institutional shareholders look to them for advice.

Last month, Tesla again proposed a pay package that consists of a 10-year stock option grant.

The company asked shareholders to reaffirm their approval of the compensation at the June 13 meeting.

Shareholders who support the compensation say Musk deserves to be rewarded for hitting performance goals.

For the pay package to be approved, a majority of shareholders must vote in favor, except for Musk’s roughly 13 percent stake and a smaller, much smaller stake held by his brother, Kimbal Musk.

Glass Lewis has previously advised against a 2018 pay package vote, with similar concerns remaining in 2024.

The proxy advisory firm shared concerns about the

The proxy advisory firm shared concerns about the «excessive size» of the pay package and is advising shareholders to vote against it at the June 13 meeting.

«The excessive size of the award, both on a pure dollar basis and in terms of the dilutive effect on exercise, remains a very major concern,» the analysis said.

«The rationale provided by the company does little to combat these concerns given their reasonable magnitude.»

In an interview earlier this month, Tesla chairman Robyn Denholm told the Financial Times that Musk deserved the pay package because the company had achieved ambitious revenue and share price targets.

Musk became Tesla’s CEO in 2008. In recent years, he has helped improve results, leading the company to a $15 billion profit from a $2.2 billion loss in 2018, while producing seven times more vehicles.

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A proxy adviser 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.

Musk currently has a net worth of $197.3 billion, which ranks him third on the Forbes Real-Time Billionaires List, with most of his assets tied up in the stocks of his companies.

Musk owns 13 percent of Tesla, but earlier this month announced an offer to secure a quarter of his voting shares.

«I don’t like Tesla becoming a leader in AI and robotics without us having ~25% voting control,» he wrote on X.

“Enough to be influential, but not so much that I can’t roll over.



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