Tesla on Monday justified a proposal to ratify Elon Musk’s USD 56 billion pay package, saying the new compensation would prove costlier, Reuters reported.
This comes days after a proxy advisory company advised shareholders vote against this proposal, the newswire noted.
Tesla argued that the pay package motivated CEO Elon Musk to generate “tremendous value” for shareholders, Reuters reported.
Proxy advisory firm Institutional Shareholder Services (ISS) the previous week called the pay “excessive,” flagging concerns about the American EV firm offering shareholders an “all or nothing” option, ahead of a vote at the annual meeting to be held on 13 June, Reuters noted.
The compensation which saw shareholder approval in 2018, offers rewards basis the company’s market value and operational milestones, the newswire stated.
A Delaware judge voided it in January, upon which Tesla has sought to move its state of incorporation to Texas, Reuters reported.
In a filing on Monday, Tesla said the shareholder recommendation by ISS stood on a “technical misunderstanding”, adding that the advisory firm recognised Tesla’s strong performance under Musk, Reuters reported.
“A functionally equivalent grant of new options could lead to an accounting change of over USD 25 billion, in comparison with the USD 2.3 billion charge originally recognised for the 2018 award,” the company noted.
“A deal is a deal. He delivered on his end of the bargain. It’s time for us to deliver on ours,” it stated.