On Monday, the electric car company’s shareholders received a letter outlining the appeal. The proposed pay package, which is the largest of its kind, is scheduled to be approved by shareholders at Tesla’s November 6 annual meeting.
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Governance experts and advocacy groups have questioned Tesla’s independence and oversight of Musk’s influence, as a result of its numerous complaints about not acting in shareholders’ best interests.
According to Denholm, the proposed performance-based plan was intended to entice Musk to stay in charge of Tesla for at least another seven and a half years.
Tesla’s success depends on Musk’s leadership, she said, and warned that the company could lose his “time, talent, and vision” without a strategy that encourages him. According to her, Musk’s position is crucial as Tesla strives to lead autonomous and artificial intelligence globally.
Musk would receive 12 tranches of stock options in exchange for ambitious goals, including an $8.5 trillion market capitalization and milestones in robotics and autonomous driving.
In addition to urging investors to re-elect three long-serving directors who have worked closely with him, Denholm’s letter describes the package as necessary to balance Musk’s incentives with shareholder value and long-term growth.
Tesla’s board has long been in the dark about its close relationship with Musk. His 2018 pay agreement was improperly awarded and negotiated by directors who were not entirely independent, according to a Delaware court ruling earlier this year.
Shareholders were urged to vote against the pay package by proxy firm Glass Lewis and Institutional Shareholder Services last week. Major institutional investors, including the passive funds with large stakes in Tesla, are frequently influenced by proxy advisers.
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Source: Aljazeera
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