Strong Opposition from Proxy Advisory Firms and Unions
Musk Presents His Vision Amid Poor Performance
Tesla's board has warned shareholders that if the $1 trillion CEO compensation plan is not approved at the shareholders' meeting, CEO Elon Musk may leave the company. On October 28, Yonhap News cited an open letter from Tesla board chair Robyn Denholm to shareholders, stating, "It is more important than ever to retain Elon Musk," and emphasizing, "Losing Elon would not only mean the loss of his talent, but also the loss of a leader who is a key driving force in recruiting and retaining talent at Tesla."
She continued, "Tesla stands at a pivotal moment with the potential to continue delivering exceptional value to shareholders," adding, "Through Elon's unparalleled vision and leadership, Tesla is transforming from a leader in electric vehicles and renewable energy to a leader in artificial intelligence, robotics, and related services."
The proposed compensation plan is structured as a 12-tranche stock award, granting shares each time Tesla achieves specific revenue or profit targets. If all targets are met, Musk will secure an additional 423 million shares, on top of his current 13% stake. This could satisfy Musk's long-standing demand for increased voting rights.
Previously, during the Q3 earnings conference call, Musk stated, "When creating the Optimus Robot Army, I need to have at least a strong influence," adding, "Otherwise, I am not confident in creating such a robot army." The board interprets these remarks as a signal of Musk's intention to ensure management continuity, viewing the approval of the compensation plan as essential. However, there is strong opposition from outside the company.
Tesla's board warned shareholders that if the $1 trillion CEO compensation plan is not approved at the shareholders' meeting, CEO Elon Musk may leave the company. The Asia Business Daily
Shareholder advisory firm Institutional Shareholder Services (ISS) recently recommended a vote against the plan in its report, stating, "Musk's compensation plan is excessive and not aligned with shareholder interests." Some unions and corporate watchdog groups in the United States have also launched the "Take Back Tesla" campaign to oppose the plan. They criticize Musk for collaborating with far-right political figures and spreading conspiracy theories, thereby damaging the brand's image. In response, Musk strongly rebutted, saying, "Proxy advisory firms are effectively corporate terrorists."
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