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In a bold move, the influential proxy advisory firm Glass Lewis has taken a stand, advising Tesla shareholders to oppose a staggering $56 billion compensation package slated for CEO Elon Musk – a proposal previously invalidated by a U.S. court. This contentious issue is set to be put to vote during Tesla’s upcoming annual shareholder meeting on June 13.
Despite the tremendous anticipation surrounding the event, Glass Lewis, in a report revealed by Seeking Alpha, has expressed significant concerns about the “excessive” dilution associated with the proposed package.
Delving into the background, the $56 billion compensation plan faced a grim fate in late January when Delaware Judge Kathaleen McCormick annulled it following a shareholder lawsuit, alleging improper approval.
Reflecting on their previous critique of the 2018 CEO Performance Award, Glass Lewis stood firm on their stance, emphasizing persisting apprehensions regarding the substantial size of the award and its adverse effect on stakeholders. The firm underscored the package’s dilutive nature and questioned the justification provided by the company.
Despite Glass Lewis’ dissent, it seems Musk retains the backing of Tesla’s board on this sensitive matter. Robyn Denholm, the board’s chairperson, defended Musk’s contribution to Tesla over the past six years and argued vehemently against the prevailing notion of unfair treatment towards him.
Interestingly, aside from the compensation quandary, Tesla shareholders will also deliberate on relocating the company’s headquarters from Delaware to Texas during the June meeting.
However, Glass Lewis has taken a stand against the proposed move, asserting that it may not align with shareholders’ best interests and could introduce unwarranted uncertainties and risks.
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