US Largest Pension Fund Also Opposes Musk's 76 Trillion Won Stock Option Grant

The representative of the largest U.S. pension fund, a major shareholder of Tesla, expressed opposition to a proposal to grant Elon Musk, CEO, stock options worth a total of $56 billion (approximately 76.692 trillion KRW).

[Image source=Reuters Yonhap News]

Marci Frost, CEO of California Public Employees' Retirement System (CalPERS), the largest pension fund in the U.S., appeared on CNBC on the 29th (local time) and stated, "Although we have not yet spoken with Tesla, at this time we will not vote in favor of the proposal." She pointed out, "We do not believe that the compensation plan aligns with the company's performance."

CalPERS is one of the top 30 investors holding about 9.5 million shares of Tesla. Bloomberg News reported that this statement "will strengthen the opposition to CEO Musk's compensation plan." Glass Lewis, a major U.S. proxy advisory firm, has also recently recommended Tesla shareholders to vote against the compensation plan, calling it 'excessive in scale.'

Previously, Tesla approved a proposal at the 2018 shareholders' meeting to grant CEO Musk stock options worth a total of $56 billion. However, this was overturned in January this year when a Delaware court ruled in favor of a minority shareholder's invalidation lawsuit. Consequently, Tesla's board of directors has resubmitted the stock option grant proposal for a vote at the shareholders' meeting scheduled for June 13.

Ahead of the shareholders' meeting, shareholders supporting the stock option grant emphasize that Tesla's market value has grown from $50 billion to $570 billion since 2018 and highlight CEO Musk's contributions during this period. On the other hand, considering Tesla's recent difficulties such as concerns over slowing electric vehicle demand, declining sales, and a sharp drop in stock price, criticism that such a large-scale stock option compensation plan is excessive continues to mount.

On the same day, CEO Musk criticized CalPERS CEO Frost's remarks on X (formerly Twitter), saying, "All contractual milestones (of the compensation plan) have been achieved, so what she is saying makes no sense," and added, "CalPERS is breaking their promises." In January, Musk also stated on X, "It is uncomfortable to grow Tesla as a leader in artificial intelligence (AI) and robotics without 25% voting rights (stake)," and if he cannot have that level of stake, he said he "would prefer to make products outside of Tesla."