Tesla Inc (NASDAQ:TSLA) investors have been urged to vote against Elon Musk’s record US$56 billion bonus by Glass Lewis, the proxy advisor, ahead of its annual general meeting next month.
Glass Lewis said it believes Musk’s pay package is “excessive” and has sent its clients a report urging them to block it at the upcoming vote on June 13.
It argued the bonus would dilute existing investors and provide Musk with greater power over the company.
Vanguard, the largest Tesla shareholder except for Musk himself, is one of the many clients of Glass Lewis.
Back in 2018, shareholders at the EV giant approved the US$56 billion bonus should Musk hit specific performance targets.
However, the vote was made void in January after a US judge found that Tesla’s directors had failed properly to disclose the full details of the package.
Glass Lewis said it believed the targets had failed to force Musk to refine his focus on the company, pointing to his other business pursuits such as Twitter/X, Space X and xAI.
“Mr Musk’s slate of extraordinarily time-consuming projects unrelated to the company was well-documented before the 2018 grant, and only expanded with his high-profile purchase of the company now known as X,” the report said.
A vote for Musk’s pay will be advisory, meaning management does not have to follow the vote.
It comes as Musk and Tesla continue to experience tough competition from Chinese rivals which have been able to produce and sell EVs at lower price points.
Tesla shares are down close to 30% in 2024.