Tesla Shareholders Urged to Reject $1 Trillion Pay for Elon Musk

Shareholders are meeting to vote on a proposed $1 trillion pay package for Tesla CEO Elon Musk next month. (Andrew Harnik/Getty Images)

A group of Tesla shareholders led by New York City employee pension funds filed a letter with the Securities and Exchange Commission Thursday urging their fellow shareholders to oppose the reelection of Tesla board members and a proposed $1 trillion pay package for CEO Elon Musk.

“The Board’s relentless pursuit of retaining its CEO seems to have harmed the Company’s reputation, led to extraordinarily high levels of executive compensation, and delayed progress on meeting key goals like full self-driving,” the letter reads.

“We are concerned that the Board remains fixated on pleasing Mr. Musk, rather than responsibly addressing his many varied pursuits, at least some of which have come at the expense of Tesla shareholders.”

It was signed by New York City Comptroller Brad Lander on behalf of the city’s employees and teachers pensions, by the state treasurers of Nevada, Massachusetts, Connecticut, Colorado, Vermont, and New Mexico, the Maryland state comptroller, and the American Federation of Teachers, among others.

Tesla’s board proposed the $1 trillion pay package last month amid an ongoing fight over an earlier $56 billion package from 2018 that is held up in the courts. Musk has consistently sought more control over Tesla.

“For such an unprecedented payday, we would have hoped to see performance targets genuinely unprecedented in their rigor,” the pension funds and union wrote in their letter Thursday, addressed to shareholders.

“Unfortunately, we are again disappointed by the Board’s performance, as they have in fact adopted performance targets that are in many cases vague, undemanding, and subject to significant discretion by what we believe is a non-independent Board.”

The annual shareholder meeting where the votes are scheduled is Nov. 6.

Tesla did not immediately respond to Barron’s request for comment.

The letter describes a Tesla board that has failed to get Musk to focus his undivided attention on the electric vehicle maker. “We believe the Board’s failure to ensure CEO Musk devotes full attention to Tesla, while making him the highest-paid CEO in history, shows how beholden it is to management,” the group said. “The Board has permitted Mr. Musk to be overcommitted for years.”

They urged shareholders to oppose the slate of director nominees up for reelection, which they call “a critical step to overhaul Tesla’s highly entrenched Board. It is in dire need of truly independent directors who will advocate for shareholder interests over the personal interests of the CEO.”

Write to Anita Hamilton at anita.hamilton@barrons.com and Liz Moyer at liz.moyer@barrons.com