Elon Musk's trillion-dollar compensation plan faces obstacles! Tesla's major shareholder, the California Public Employees' Retirement System, plans to vote against it
Elon Musk's $1 trillion compensation plan faces opposition from the California Public Employees' Retirement Fund, which holds approximately 5 million shares of Tesla stock. A fund spokesperson stated that Tesla's compensation plan is significantly higher than that of comparable companies and may concentrate power in a single shareholder. Musk hopes to gain support at the shareholder meeting on November 6, where the compensation agreement spans 10 years and requires performance targets to be met for full compensation. The California Public Employees' Retirement Fund has previously opposed other compensation plans proposed by Musk
According to the Zhitong Finance APP, Calpers, the largest public pension plan in the United States, is planning to vote against the $1 trillion compensation agreement reached between Elon Musk and Tesla (TSLA.US), creating uncertainty for what would be the highest compensation package in American corporate history. Data collected shows that Calpers holds approximately 5 million shares of Tesla stock.
A spokesperson for Calpers stated via email, "The CEO compensation plan proposed by Tesla is several orders of magnitude higher than those of peer companies' CEOs. Moreover, it will further concentrate power in the hands of a single shareholder."
Musk has been advocating for the compensation plan to secure crucial shareholder votes at the automaker's annual shareholder meeting in Austin on November 6. The world's richest man urged investors to support the plan during the company's earnings call this month and criticized shareholder advisory firms that oppose it.
The $1 trillion compensation agreement he signed is a 10-year plan, under which Musk must meet certain performance targets to receive full compensation. Additionally, Musk can acquire more shares, allowing him to own at least 25% of the automaker.
Musk's past compensation plans have also faced scrutiny. Last year, Calpers CEO Marcie Frost stated that the pension plan conflicted with Musk's proposed $56 billion compensation package. The plan previously opposed a more than $50 billion agreement in 2018. That compensation package was ultimately rejected by a Delaware court, although Tesla is appealing that ruling
