Former Tesla board member says he won’t vote for Musk’s $56 billion pay package

He understood that he would not support the $56 billion pay package of Elon Musk, Tesla’s former audit committee chairman and a prominent clean-tech venture capitalist, and that other investors would vote against the CEO’s pay plan next week.

“Look, Elon has done an extraordinary job; He created one of the transformative institutions of the age. But asking for a $55 billion pay raise precisely at a time when you’ve missed quarterly numbers, growth has slowed, and you’ve laid off 15% of your workforce is presumptuous, to say the least. “

This is according to Steve Westleywho spoke on CNBC on Thursday. He served on the Tesla board from 2007 to 2010 and is the former Comptroller and Chief Financial Officer of the State of California. Westley served on the boards of CalSTRS and CalPERS, the state’s two largest pension funds, which invest more than $500 billion.

The reality, Westley said, is that “an awful lot of the world’s pension funds,” including those in California, are “very likely to vote no,” which is “going to be high drama next week, and everybody’s going to be watching.”

Tesla shareholders are set to vote more shares on Musk’s pay package, which is worth a maximum of $56 billion. A judge revoked his compensation in January Management concerns and Tesla’s board is asking shareholders to approve it for a second time at its annual shareholder meeting next week. The board has asked investors to support the company’s consolidation position from Delaware to Texas, where Tesla is headquartered.

Tesla’s investor base is a mix of large institutional investors, including The Vanguard Group, which owns 7.2%, and BlackRock, which owns 5.9%. According to Tesla’s 2024 shareholder report. Musk owns a substantial stake in the company in addition to an army of small retail investors who are accustomed to Tesla ads and events. Investors have taken to posting on social media when they vote their shares and giving advice to others on how to ensure they vote in time for the meeting. Other big mainstream investors have publicly sided with Musk.

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Longtime Tesla Bull Kathy Wood, Published on Thursday at X “No other executive is as connected to shareholders as Musk.” Wood wrote that Musk would work without pay starting in 2018, based on a pay package up for a vote next week. Current shareholders will benefit from another five or more years with Musk leading Tesla, said Wood, founder, CEO and chief investment officer of Arc Investment Management.

“After Elon and shareholders have already taken the risks associated with producing Tesla’s world’s best-selling car, how can shareholders avoid his pay package? Unconscionable!” Wood wrote.

However, other investors remain firmly in Westley’s camp. The Westley Group founder said profits and growth have slowed from Tesla’s meteoric rise between 2018 and 2021. Also, shareholders are concerned about the company’s ability to deliver a low-cost Tesla vehicle and fully self-driving capabilities.

“The facts on the ground have changed, and that’s why you’re likely to see stakeholders come back with a very different perspective,” Westley said.

Westley said it was unclear whether or not Musk would be with the EV maker if the plan failed to win majority support.

“If you had asked me a couple of years ago if Elon would have left Tesla, I would have said not in a million years,” he said. “Right now, that prospect is a little cloudy—we’ll see.”

Tesla did not immediately respond to a request for comment.

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