A second major proxy firm told investors to reject Elon Musk's $1 trillion Tesla pay deal

A second major proxy firm just told Tesla investors to reject Elon Musk's $1 trillion pay plan, warning it hands him too much power for too little performance.Kevin Dietsch/Getty ImagesGlass Lewis joined ISS in urging Tesla investors to reject Elon Musk's $1 trillion pay deal.The proxy firm warned Musk's plan could shrink shareholder stakes and reward modest performance.Tesla hit back in a lengthy X post, calling the proxy firms' recommendations "misguided."Thought Elon Musk's $1 trillion Tesla pay package would have an easy ride?Think again.A second influential proxy-advisory firm is urging Tesla shareholders to vote against Elon Musk's proposed $1 trillion compensation deal, warning that it would hand the billionaire CEO an "unprecedented" payout while shrinking other investors' stakes.Glass Lewis & Co. told clients in a paper published last Friday that the award "warrants significant shareholder concern."It joined Institutional Shareholder Services (ISS) in opposing the deal ahead of Tesla's November 6 annual meeting.Tesla did not immediately respond to a request for comment.'Excessively dilutive' and 'extraordinary'Glass Lewis's 90-page report, reviewed by Business Insider, calls the package "excessively dilutive," estimating that, if fully exercised, it could cut existing shareholders' ownership by about 11.3%.The firm valued the deal at $141.6 billion — far above Tesla's own $87.8 billion estimate — and said Musk could reap "billions in compensation and a materially increased ownership stake" even if he hits just one of the 12 performance tranches."The potential upfront and future dilutive impacts to shareholders, as well as extraordinary pay levels without commensurately exceptional performance through the achievement of even just a few tranches, warrant significant concern," Glass Lewis wrote in its analysis.The package would grant Musk up to 423 million shares, or about 12% of Tesla's adjusted share count, if he meets a set of market-cap and 12 operational milestones — including pushing Tesla's valuation to $8.5 trillion by 2035.Governance and focus under fireThe report also raised red flags about Tesla's board independence and oversight of Musk's pay.Glass Lewis said Musk's compensation is being reviewed by a board that has long faced questions about its closeness to the CEO, citing directors with personal or professional ties to him that date back years.The firm said that dynamic was central to a Delaware court ruling earlier this year that struck down Musk's 2018 pay package, finding that those relationships compromised the approval process.Those concerns remain relevant now, Glass Lewis added.Glass Lewis also questioned controls on ensuring Musk's focus remains on Tesla, given his slate of other ventures, including SpaceX, xAI, X, and Neuralink."The size of the award could result in the scenario where Mr. E. Musk receives billions in compensation and a materially increased ownership stake," the firm said, "even if only a single tranche is earned."The report further argued that the early milestones "do not appear as herculean as the size of the proposed tranches would suggest," implying Musk could unlock massive value without delivering the kind of outlier performance the package purports to demand.Tesla and its allies push backWhile Tesla did not respond to Business Insider, it sent a fiery X post on Monday, blasting ISS and Glass Lewis as "misguided."The post said both firms have "recommended against Tesla's proposals time and time again since the 2018 CEO Performance Award was introduced.""It's a good thing our shareholders ignored those recommendations," Tesla wrote, "otherwise they may have missed out on our market capitalization soaring by 20x from March 2018 to August 2025."The company accused the advisors of using "one-size-fits-all checklists" that "undermine shareholders' interests," and added their recommendations "attempt to override the mandate our shareholders delivered to Elon and ignore the staggering financial results delivered under Elon's leadership."Cathie Wood, the founder of ARK Invest and a longtime Tesla supporter, predicted the plan would still pass "decisively" despite opposition from proxy firms and index funds.She accused them of trying to sway shareholders while doing "no fundamental research," calling index-based investing "a form of socialism."Read the original article on Business Insider

Comments

Business News

Rachel Reeves axes ‘arbitrary rules’ costing firms £6 billion ahead of Budget

Evening Standard

Comments

Business News

Rachel Reeves axes ‘arbitrary rules’ costing firms £6 billion ahead of Budget

UK elderly population at record high as more men live to very old age

FTSE 100 holds firm amid hefty gold miner losses

Brexit has made UK economy and productivity ‘weaker’ than thought, says Reeves

FTSE 100 holds firm amid hefty gold miner losses

Brexit has made UK economy and productivity ‘weaker’ than thought, says Reeves

Kering And L’Oréal Double Down On Their Strengths In $4.7 Billion Beauty Deal

Broadcast TV Gets Record Boost Thanks To Football's Return

World Series Teams Waded Through Tough Tournament

China’s New AI Strategy Explained

Vincent Kompany And Bayern Munich Agree Contract Extension Until 2029

The Big Problem With Netflix Banking On ‘KPop Demon Hunters’

What Time Does ‘Gen V’ Season 2 Finale Begin? How To Watch

US Public Opinion On Internationalism

$1 Trillion And Counting: Do Federal Grants Sabotage Regulatory Reform?

Rajah Caruth Signs Xfinity Series Deal With JR Motorsports

Pardoned Capitol Rioter Arrested After Threatening Murder Of Hakeem Jeffries

Trump scolds ‘young lady’ reporter for Argentina bailout question: ‘You don’t know anything about it’

Bank should take concerns over private finance ‘very seriously’, says Bailey

Bank should take concerns over private finance ‘very seriously’, says Bailey

UK inflation expected to jump to 21-month high of 4%

Americans losing $728 per year due to simple food mistakes. Five easy changes to help you save money

Warner Bros. Discovery Considers Sale—Stock Jumps 10%

WWE Missing Golden Opporunity With Jey Uso Vs. CM Punk

AWS Outage: What To Know As Amazon Says Cloud Service Is Back To Normal

Why Disney Shot Down Adam Driver’s ‘The Hunt For Ben Solo’ Movie

From Performance To Purpose: Meet The CMO Redefining Brand Growth Through Balance

The Beatles Chart A Top 10 Bestseller With A Beloved Classic

The 3 Best Movies To Watch On Netflix This Week (#2 Is Leaving Soon)

Week 8 Fantasy Football Sleepers: 5 Players You Should Target

The Next Retail Shake-Up: AI Agents That Redefine Your Job

A Too ‘Busy’ Stranger Things Actor Isn’t Back For Season 5

How PBS Is Navigating Turbulent Seas Of Federal Defunding

‘The Long Walk’ Is Now Streaming—How To Watch The Stephen King Thriller At Home

Tax Hikes And Tax Limits On The November Ballot In Colorado And Texas

Taylor Swift’s Surprising Sales Strategy Pays Off As She Scores New No. 1s

Dustin Poirier On Life After Retirement From UFC Octagon: ‘Trying To Keep My Mind Busy’

5 Burning Questions Facing The Milwaukee Bucks This Season

Senne Lammens Is Already Proving To Be A Big Upgrade For Manchester United

Madonna’s Previously-Shelved Song Becomes A Bestseller Ahead Of A New EP

Elevance Health’s Profits Eclipse $1.1 Billion Despite Rising Costs

Trump, Albanese Build A Link In The Rare Earth Minerals Chain

Are Bitcoin And Blockchain Powering A New Decentralized Space Race?

Gayle King posts selfie with Fox News host Jesse Watters — prompting liberal meltdown

Warner Bros. Discovery says it’s open to a sale after ‘unsolicited offers,’ stock surges 9%

Stealth inheritance tax rises lead to record £4.4bn take for Treasury

High street banks found to offer worse interest rates as new 4.75% account hits market

November 2025 payment dates for benefits and pensions plus cost of living support

The NBA’s Highest-Paid Players 2025

Natural Gas May Save US Producers As Oil Falls

Utah Jazz Are Looking To Run The Tyrese Maxey Playbook With Walker Kessler

Team India Generates Bedlam Like No Other Cricket Team

Tuesday, October 21. Russia’s War On Ukraine: News And Information From Ukraine

Oklahoma City Thunder: 2025-26 Season Preview

How To Have A Difficult Conversation - 4 Tips For Leaders

Maximize Productivity: Why Employee Retention Is Game-Changing

Administrators reveal locations of 68 Pizza Hut restaurants set to close

All the Pizza Hut restaurants in London set to close

Thames Water delays challenging watchdog’s ruling on bills amid rescue plan

Thames Water delays challenging watchdog’s ruling on bills amid rescue plan