Elon Musk’s $2.6bn pay package ‘cheered by big Tesla shareholders’

0
687
Elon Musk's $2.6bn pay package 'cheered by big Tesla shareholders'
Elon Musk's $2.6bn pay package 'cheered by big Tesla shareholders'
Elon Musk's $2.6bn pay package 'cheered by big Tesla shareholders'
Elon Musk’s $2.6bn pay package ‘cheered by big Tesla shareholders’

Elon Musk’s $2.6bn pay package rejected by US pension giant ahead of crunch investor vote.

The Californian State Teachers Retirement System (CalSTRS) said Musk’s 12-tranche stock award was “just too great” in diluting other shareholders.

Tesla is due to hold its AGM later today. The company needs a majority of voters to support proposals in order for them to be passed.

READ  Coronavirus USA Updates: Idaho governor announces plan to reopen state

Proxy firm Institutional Shareholder Services (ISS) has already called Musk’s proposed remuneration “excessive”. Rival Glass Lewis called it “substantial”.

CalSTRS director of corporate governance Anne Sheehan said: “Given the size of the award, we believe the potential dilution to shareholders is just too great. In addition, we have concerns about the lack of focus on profitability for the company and the one profitability metric that is used excludes the cost of stock-based compensation.”

READ  Coronavirus UK Update: Latvia to allow public gatherings of up to 300

However, some of Tesla’s other institutional backers have come out in support of Musk. Fund giant T Rowe Price said the pay was “aligned with shareholders’ long-term interests”.

READ  Village That Predates the Pharaohs Found in Egypt, Report

The share award will be Musk’s only remuneration with respect to Tesla. Stock options will vest in multiple stages over a 10-year period.

The first tranche is triggered when Tesla’s stock market valuation hits $100bn, with subsequent slices of shares contingent on further $50bn increases. Tesla is currently valued at just over $50bn.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.