CalPERS Stance on Tesla CEO’s Compensation
CalPERS, the California Public Employees’ Retirement System, has taken a firm position against Elon Musk’s $56 billion pay package, expressing concerns about its alignment with Tesla’s performance.
Key Points:
- CalPERS CEO Marcie Frost believes that the compensation does not reflect the company’s performance.
- As one of Tesla’s major investors, CalPERS holds 9.5 million shares in the electric vehicle manufacturer.
- The pension fund’s opposition adds weight to the ongoing debate surrounding Musk’s compensation.
Elon Musk’s Response
Elon Musk responded to CalPERS’ opposition on social media, defending the fulfillment of all contractual milestones in his pay package. He criticized CalPERS for allegedly going back on their agreement.
Controversy and Rebuttals
- Proxy advisory firm Glass Lewis advised Tesla shareholders to reject the compensation plan, citing a disconnect from the company’s actual performance.
- Tesla emphasized Musk’s contribution to shareholder wealth and his personal investment in the company.
Legal Challenges and Shareholder Support
A Delaware judge previously criticized Musk’s pay package as excessive, leading to Tesla seeking reaffirmation from shareholders. Advisory firm Egan-Jones Proxy Services supported the pay package, emphasizing the importance of Musk’s leadership for Tesla’s growth and innovation.
Egan-Jones Recommendations
- Egan-Jones endorsed maintaining Musk’s compensation plan for sustained growth and innovation at Tesla.
- The firm also backed Tesla’s proposal to relocate its state of incorporation from Delaware to Texas for operational efficiency and cultural alignment.