Several institutional Tesla shareholders have expressed regret over the approval of Elon Musk’s massive $55 billion pay package, citing concerns about its appropriateness and its potential impact on the company’s governance and leadership.
Despite a significant 72% approval from shareholders, including major entities like Vanguard, some institutional investors remain skeptical about the package’s alignment with Musk’s performance and its implications for Tesla’s future.
Anders Schelde, chief information officer of AkademikerPension, a Danish pension fund invested in Tesla, highlighted governance issues within the company. He remarked that while Tesla is viewed as a great company, concerns persist about its leadership under Musk.
Schelde’s sentiments were echoed by eight institutional shareholders who jointly opposed Musk’s pay package and the reelection of certain board members in a May letter, although shareholders ultimately voted to retain these members.
During a recent shareholder meeting, Musk indirectly addressed institutional shareholders’ concerns, suggesting a disconnect between them and Tesla’s innovative endeavors. This exchange highlighted broader tensions over governance and strategic direction within the company.
New York City Comptroller Brad Lander, a signatory of the opposition letter, criticized the pay package approval as a mistake. Lander emphasized the need for robust board oversight and a CEO fully dedicated to Tesla’s growth, suggesting a need to renegotiate Musk’s incentives to better align with shareholder interests and company goals.
The California Public Employees’ Retirement System (CalPERS), another significant shareholder, also voiced objections to Musk’s pay package, describing it as excessive and potentially detrimental to shareholder value.
CalPERS’ stance underscores broader institutional concerns over executive compensation and its impact on Tesla’s financial health and long-term profitability.
While Elon Musk’s record-breaking pay package received majority approval from Tesla shareholders, significant institutional investors remain apprehensive.
They question its fairness, its alignment with company performance, and its implications for governance and shareholder value. These sentiments reflect ongoing debates within Tesla’s investor base regarding the company’s leadership and strategic direction under Musk’s stewardship.
