A new campaign is adding to the growing chorus of pushback against Tesla CEO Elon Musk’s absurdly large proposed $1 trillion pay package, this time led by unions and public interest groups. The campaign encourages individuals to get in contact with their pension or retirement funds and ask them to vote against Musk’s payday.
In September, Tesla’s board proposed a stock award worth up to $1 trillion for CEO Elon Musk. It includes several milestones regarding Tesla stock and product performance, each of which unlocks tens of billions of dollars for Musk.
It’s the largest award proposed for any CEO of any company by multiple orders of magnitude – with previous proposed Musk awards holding the second and third place positions as well.
In addition to that much-reported proposal, another proposal is up for a vote which would create a special share reserve of 208 million shares (current value $92 billion) which the Tesla board can give to Elon Musk with no strings attached.
Both proposals will be voted on by TSLA shareholders at Tesla’s shareholder meeting on November 6.
Many groups have chimed in to raise the alarm about these proposals and how they’re bad for Tesla shareholders. Most recently, the two largest advisory groups, ISS and Glass Lewis, recommended that shareholders vote against. Earlier, a group of public pension funds including the comptrollers of several US states, the American Federation of Teachers, and a Swedish insurance group. Tesla has lashed out with attacks on each of these groups after their dispassionate analysis of the proposals’ flaws.
We at Electrek also did a deep dive into the proposals, with background and details on the proposals and how they’re bad for employees and shareholders, which you can read here: Elon Musk’s $1 trillion stock award gets more ridiculous the more you look into it
Now a new group has joined the chorus, calling itself “Take Back Tesla.” It’s led by unions, encouraging individuals with pension or retirement funds to get in touch with the controllers of those funds and ask them to vote no on Musk’s pay package.
Take Back Tesla consists of the American Federation of Teachers (who signed the previous pension fund letter) and the Communication Workers of America, who represent around 2.5 million workers combined.
Several public interest groups have joined on, including Public Citizen, Stop the Money Pipeline, Americans for Financial Reform, Ekō, and People’s Action Institute. These groups are generally focused on reducing the power of corporations in politics, reducing wealth concentration, and opposing the corrupting and polluting power of the fossil fuel industry.
The groups bring up some of the same points that have been brought up before, but are more focused on public advocacy and Musk’s recent political actions, in addition to protecting value for the common shareholder.
Rather than talking about dilution (which the proposals will increase, removing rights and value from shareholders), Take Back Tesla focuses more on the inequity involved in the plan. It points out that the proposed pay package for Musk tops out at a Tesla market cap of $8.5 trillion, about 2x the current market cap of the most valuable company on Earth, NVIDIA. However, Musk would be paid 2,000x as much as NVIDIA’s CEO Jensen Huang, who made $50 million last year.
It also asserts that a Tesla employee making the median Tesla salary would need to work 1.7 million years to match a single year of Musk’s yearly compensation under the plan (we checked the salary numbers, and it seems Take Back Tesla might be using a low estimate or not counting stock-based compensation – but that doesn’t change the point too much, especially since Tesla just drained its employee stock reserve to give it all to Elon Musk).
The groups are also particularly interested in the effects that Musk himself has had on employees around the country. AFT president Randi Weingarten said:
The Tesla board, instead of upholding basic governance standards, wants to green light an outrageous $1 trillion pay package for a CEO who has spent most of the year engaged in childish political brawls, rather than working to create shareholder value. To reward this destructive behavior with an obscene salary is a slap in the face—not only to the federal workers he’s fired, but to the retirees whose pensions are invested in Tesla stock. We urge shareholders to join with us and demand their state pension officials reject Musk’s money grab and confiscate the Tesla board’s rubber stamp.
The reason Take Back Tesla is interested in pension funds is because, beyond individual Tesla shareholders, many people in the US are invested in TSLA via their 401(k) or IRA. Since TSLA is one of the largest companies on the market, almost every fund will hold some exposure to it. Which means that this issue isn’t just of interest to those who directly hold TSLA shares, but to almost everyone with any exposure to the stock market – all of whom would be better off with more stable leadership at the top of one of the largest companies in America.
It could seem strange that groups looking to stop the fossil fuel industry would target Elon Musk, CEO of the largest American electric car company. But Musk has recently proven himself to be one of the fossil fuel industry’s greatest political allies.
Musk gave $288M, more money than any individual, to a political effort which strives to harm EVs, and the group he donated that money to has put significant effort into increasing oil use, subsidizing gas cars and destroying the climate, not just in the US but abroad. This has caused great harm to the US EV industry, but Musk has continued to offer rhetorical and monetary support regardless.
In addition, during his time cosplaying as an unofficial government advisor, Musk recommended the firing of hundreds of thousands of government employees, working to balloon the government deficit by making it less able to do its job. This is particularly of interest to the unions involved in this effort, who protect the interests of the very same public employees Musk targeted.
Take Back Tesla urges institutional shareholders to “oppose excessive CEO compensation and demand that any proposed pay package for Musk be reasonable and rationally benchmarked to the compensation of CEOs at other similarly sized companies.” The groups also oppose “the election of any Tesla Board of Directors members who do not demonstrate appropriate independence from the CEO and adherence to corporate governance best practices.”
For more information and to sign a petition which will be delivered to fund managers, visit takebacktesla.com.
Author: Jameson Dow
Source: Electrek
Reviewed By: Editorial Team
