Tesla shareholders opposed Elon Musk's record $1 trillion bonus to Elon Musk

A group of Tesla shareholders opposed the re-election of the board of directors and a new compensation package for Elon Musk worth $1 trillion. The shareholders' meeting is scheduled for November 6 - that's when the issue should be decided. Even if the bonus is approved, Musk needs to meet a number of conditions to receive it - in particular, Tesla's capitalization must reach $8.5 trillion. In September, the company's securities rose by a third, but analysts remain cautious.

A group of Tesla shareholders led by New York City employee pension funds has sent a letter to the U.S. Securities and Exchange Commission (SEC) urging other owners of company stock to vote against the re-election of board members and the proposed $1 trillion compensation package for Elon Musk. They said the board's failure to fully engage the businessman, while being the highest-paid CEO in history, shows how dependent the board is on the company's management.

"The unbridled desire to retain the CEO appears to have damaged the company's reputation, led to unprecedentedly high compensation levels, and delayed progress on key goals such as fully autonomous driving," the letter said.

Shareholders called for a vote against the board nominees proposed for re-election, calling it "a key step to refresh Tesla's deeply entrenched management team." They said they need truly independent directors who will stand up for the interests of investors, not Musk.

The annual meeting of shareholders, at which the vote will take place, is scheduled for Nov. 6.

In September, Tesla's board of directors offered Musk a new $1 trillion compensation package for the next decade.During this period, the head of the company will receive neither salary nor bonuses, but will be able to count on a bonus in the form of 12 packages of 35 million shares as he achieves certain goals: increasing Tesla's market value to $8.5 trillion, increasing profits by 24 times, as well as the sale of 12 million electric cars, 1 million robot cabs and 1 million robots based on artificial intelligence. Now these figures look unrealistic, says the Financial Times.

The package was offered amid ongoing litigation over a previous $56 billion bonus approved in 2018, The Barron's writes. However, the FT recalls that that agreement was also considered unattainable, but eventually fully materialized, bringing Musk the largest reward in history.

Tesla shares lost more than 5% on October 2, despite the company reporting record electric car deliveries last quarter on that day. They rose for the first time in three quarters to 497,099 vehicles, beating Wall Street's expectations.

At the premarket on October 3, the company's quotations added 1.6%.

The company's value rose 33% for September, posting its best monthly performance this year, offsetting a drawdown earlier in the year. Still, Wall Street continues to remain cautious on Tesla stock. Only 46% of analysts who have assigned ratings to Elon Musk's company advise its securities to buy (Buy and Overweight ratings). Another 32% hold a neutral position with a rating of Hold, and 24% - suggest selling (Sell and Underweight), adds Bloomberg.

The consensus target price of $347 implies a 20.4% decline in the company's market value from the last close on October 2.

This article was AI-translated and verified by a human editor