Tesla Inc (TSLA: NSD) shareholders are facing a decision on CEO Elon Musk’s compensation plan at the company’s annual meeting scheduled for June 13th. According to a recent report, a proxy advisory firm has recommended that shareholders reject the pay package.

Concerns Over Alignment and Discretion: 

The proxy advisory firm argues that the compensation plan is not well-aligned with Tesla’s performance metrics. They also express concerns that the plan grants Musk excessive discretion over his own pay.

Musk’s Duality as CEO and Largest Shareholder: 

Another point of contention raised by Glass Lewis is Musk’s dual role as CEO and Tesla’s largest shareholder. The firm suggests this creates a potential conflict of interest, as Musk benefits directly from an inflated stock price. The upcoming shareholder vote on June 13th will shed light on whether investor sentiment towards Musk’s compensation has changed.

Bottom Line:

This is not the first time Musk’s compensation has drawn scrutiny. In 2021, Tesla shareholders approved a similar pay plan, but a significant number of votes were cast against it.