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Tesla\u2019s board is practically begging shareholders to approve CEO Elon Musk\u2019s $45 billion pay package at next month\u2019s annual meeting, but not everyone is onboard and now the EV maker is on the defensive.<\/p>\n
In a 71-page report published over the weekend, proxy adviser Glass Lewis encouraged shareholders to vote against Musk\u2019s pay package, in part because of its \u201csheer size\u201d<\/a> and the dilutive effect on current shareholders that would take place if Musk exercised his stock options. The proxy adviser, which gives recommendations to institutional investors on how to vote at annual shareholder meetings, also said it was concerned about Musk being distracted from his focus on Tesla because of responsibilities at his other ventures, including social media company X<\/a>.<\/p>\n Tesla shot back at the proxy adviser in a Thursday letter<\/a> titled \u201cWhat Glass Lewis Got Wrong About Tesla.\u201d In response to Glass Lewis\u2019 concerns over the skyrocketing value of Musk\u2019s shares, his focus and commitment to Tesla, and the \u201cexcessive\u201d size of his compensation, the EV maker repeatedly points to the more than $735 billion in value Tesla has gained in under six years.<\/p>\n Moreover, the company wrote that giving Musk his multi-billion-dollar payday was the right thing to do.\u00a0<\/p>\n \u201cTesla believes it should abide by its commitment to Elon just as Elon delivered on this commitment to Tesla. A deal is a deal. That is the fair and ethical thing to do,\u201d the letter reads.<\/p>\n Musk\u2019s pay package was originally approved by shareholders in 2018 but was struck down by a Delaware judge<\/a> who, in part, cited concerns over the independence of Tesla\u2019s board of directors when it approved the compensation plan. In April, the company said it would once again put Musk\u2019s pay package to a vote<\/a> at June\u2019s annual meeting. It is also asking shareholders to approve the company moving its incorporation to Texas from Delaware, a proposal that came after Musk\u2019s pay package was voided by the judge in January.<\/p>\n Although company proposals often pass with overwhelming numbers at the annual shareholder meeting, some large investors are opposed. On Wednesday, the California Public Employee Retirement System (CalPERS) said it would vote against the pay package. Last week, a group of investors including the New York City pension funds<\/a> also recommended shareholders withhold support from the proposal, Fortune<\/em> reported.\u00a0<\/p>\n Still, Tesla has pushed hard to convince shareholders to approve the pay proposal at the June annual meeting, including through advertisements, a website, and a video from board chair Robyn Denholm<\/a>. Musk, himself, is offering a tour<\/a> of the company\u2019s Texas production lines for the Cybertruck and Model Y to a dozen shareholders who vote yes on his pay package.<\/p>\n Tesla did not immediately respond to Fortune<\/em>\u2018s request for comment.<\/p>\n In the EV maker\u2019s letter filed Thursday, it emphasized that approving Musk\u2019s pay is appropriate for the billions in value growth he has helped the company achieve.\u00a0<\/p>\n \u201cElon was fully prepared to earn nothing if he failed stockholders,\u201d the letter read. \u201cBut he did not fail stockholders. He delivered. In fact, he delivered more value than expected in half the time allotted.\u201d<\/p>\n<\/div>\n