Investment firm Gerber Kawasaki’s co-founder Ross Gerber has publicly criticized Tesla Inc.’s Board of Directors for supporting Elon Musk’s $1 trillion pay package. Gerber believes that the board is prioritizing Musk’s interests over those of other shareholders.
Musk’s Interests Over Investors
Gerber stated that he has never seen a worse Board of Directors than Tesla’s, and that it is transparent that they all represent Musk’s interests with zero representation of the other 85% of the company. He described the situation as “absurd,” highlighting that Musk is essentially being granted $1 trillion of Tesla’s shareholder value based on arbitrary goals.
Threat to Leave
Gerber’s comments also pointed out that these goals are tied to a threat Musk made to leave the company. The criticism from Gerber comes at a time when Tesla’s board is under scrutiny for its proposed compensation package for Musk.
Scrutiny Over Compensation Package
According to Gary Black, managing partner at The Future Fund, Tesla shareholders are expected to approve Musk’s nearly $1 trillion pay package at the upcoming meeting. This package is one of the largest in corporate America. Tesla Chair Robyn Denholm has warned shareholders that Musk might step down if the board rejects his proposed pay package, emphasizing Musk’s leadership as crucial for Tesla’s future.
Support from Florida Pension Fund
The State Board of Administration of the Florida Retirement System, which holds over $1 billion in Tesla stock, has backed Musk’s compensation plan. They view it as a “bold, performance-driven incentive structure” with potential benefits for investors if Tesla meets its metrics. If Tesla meets all metrics within this plan, investors will benefit from incremental value creation of $7.5 trillion.
Key Points
- Ross Gerber criticizes Tesla’s Board of Directors for supporting Elon Musk’s $1 trillion pay package
- Gerber believes the board prioritizes Musk’s interests over those of other shareholders
- The compensation package is one of the largest in corporate America
- Tesla Chair Robyn Denholm warns that Musk might step down if the board rejects his proposed pay package
- The State Board of Administration of the Florida Retirement System backs Musk’s compensation plan