The California Public Employees Retirement System (CalPERS) has announced its intention to vote against Tesla Inc. CEO Elon Musk’s $1 trillion compensation award. This decision is based on the belief that the package would concentrate power in a single shareholder, undermining the principles of corporate governance.
Concentration of Power
The proposed compensation package has been deemed excessive by many, including CalPERS, which owns approximately 5 million Tesla shares, valued at around $2.3 billion. The fund’s spokesperson expressed concerns that the package would consolidate power in the hands of a single individual, potentially compromising the interests of other shareholders.
Opposition from Proxy Advisory Firms
Proxy advisory firms, such as International Shareholder Services (ISS) and Glass Lewis, have also voiced their opposition to the compensation package. These firms play a crucial role in advising shareholders on how to vote on important corporate matters.
Support from Other Quarters
Despite the criticism, Musk’s pay package has received support from some notable figures, including:
- The Florida Retirement System’s State Board of Administration (SBA), which holds over $1 billion in Tesla stock
- TV host Jim Cramer, who believes Musk deserves the compensation award due to his exceptional performance and value to the company
- Cathie Wood, CEO of ARK Invest, who predicts that the pay package will be approved decisively at the upcoming shareholder meeting
Criticism from Experts
However, not everyone is convinced that the compensation package is justified. Some experts, such as Ross Gerber, co-founder of Gerber Kawasaki, have labeled the award as “insanity” and questioned the independence of Tesla’s Board of Directors.
Elon Musk’s Response
Musk has responded to the criticism by calling proxy advisory firms “corporate terrorists” and accusing them of voting on “random political lines.” This statement has sparked controversy and highlights the intense debate surrounding the compensation package.
Conclusion
The debate surrounding Elon Musk’s $1 trillion compensation plan continues to unfold, with various stakeholders expressing their opinions on the matter. As the shareholder meeting approaches, it remains to be seen whether the package will be approved, and what implications this will have for Tesla and its investors.