A group of Tesla shareholders is urging investors to vote against a multi-billion-dollar share package for company boss Elon Musk, saying it was detrimental to the company's best interests.
The group, which includes New York City Comptroller Brad Lander, also appealed to investors to reject the reelection of board members including Musk's brother and James Murdoch, a former executive at media company Twenty-First Century Fox.
In the letter the group expressed concerns about Tesla's lagging performance compared to competitors and the broader market, attributing it to Musk's numerous projects and controversial decisions, including the acquisition of social media platform Twitter, now X. It also cited "his legal and personal troubles."
"Tesla's reputation has been deeply intertwined with that of Elon Musk, and there are indications that the steady stream of negative Musk-related press coverage has led to a decline in the Company's reputation among consumers which in turn is having a negative effect on Tesla's bottom line," the letter reads.
The shareholder group emphasized that ratifying Musk's pay package would not advance Tesla's long-term growth and stability.
The share package, which was valued at $56 billion at the time and recently appraised at $46 billion, was approved by shareholders in 2018. In January, a judge in Delaware ruled it was unfair following a lawsuit by a group of shareholders and instructed the plaintiff and Tesla to work out a solution.
The letter stated that approving the compensation package could lead to lawsuits alleging corporate waste, given Musk's perceived divided attention as a part-time chief executive officer.
The group argued that the excessive nature of the award lacks incentivization and might pave the way for future compensation requests from Musk.
Citing poor management oversight of worker conditions, safety violations and discrimination lawsuits, the shareholder group criticized the board's lack of effective governance and its push to reinstate the 2018 pay package without modifications.
Stockholders are scheduled to vote on the package at the company's annual meeting on June 13.
