Pension funds split vote on Musk pay package
May 19th, 2024
Tesla shareholders were split in their vote on Elon Musk’s $55.8 billion pay package, with many US and international pension funds voting against the measure.
While support from large institutional investors meant the package passed, Norges Bank Investment Management (NBIM) voted against the deal, Pensions and Investment reports.
NBIM’s statement said: “While we appreciate the significant value generated under Mr. Musk’s leadership since the grant date in 2018, we remain concerned about the total size of the award, the structure given performance triggers, dilution, and lack of mitigation of key person risk.”
The California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) also voted against the pay package.
CalPERS CEO Marcie Frost said: “This exorbitant compensation package is at odds with CalPERS’ longstanding views on executive pay.
“The compensation is excessive when compared to executives at peer companies, highly dilutive to shareholders, and isn’t tied to the long-term profitability of Tesla.”
However, other large investors including Vanguard and the Florida State Board Administration, voted for the measures, which passed with around 72% of votes cast in favour overall, according Tesla’s SEC filing following the AGM.
Following the vote, Musk is set to receive the largest pay package in corporate US history.
The deal, negotiated by Tesla’s board of directors, was initially voided by a judge in Delaware after a small Tesla shareholder, Richard Tornetta, sued the company in a shareholder derivative lawsuit.
Following the re-vote at the company’s 2024 Annual Meeting of Stockholders to approve the package, which the company announced in April, Musk must now appeal to overturn allegations in the original case that the board did not conduct its full due diligence before making the offer.
Last Updated: 20 June 2024