A faction of Tesla investors is campaigning to remove Elon Musk’s brother from the board of the electric vehicle manufacturer amid disputes surrounding the CEO’s $56 billion pay agreement.
This group, holding a minority stake in the company, argues that Kimbal Musk and fellow board member James Murdoch cannot effectively oversee Elon due to their personal connections to the billionaire.
Additionally, these Tesla shareholders are appealing to other investors to veto a $56 billion compensation plan for Elon, which a court rejected in January but is now being reintroduced by Tesla’s board.
The dissenting shareholders include Amalgamated Bank, AkademikerPension, Nordea Asset Management, New York City Comptroller Brad Lander, Share, SOC Investment Group, Unison, and United Church Funds.
In a communication to other Tesla investors, they expressed concerns about “a significant governance failure” at Tesla, cautioning that the board is overly influenced by directors closely linked to Elon Musk.
“Kimbal, Elon’s brother, has served on the board for 20 years, and James Murdoch has been a long-standing personal friend of the CEO,” the letter stated.
Elon’s compensation package was initially approved by shareholders in 2018, offering him substantial stock awards contingent on achieving specific targets related to Tesla’s market value, sales, and profits. Although Elon met these benchmarks, a Delaware judge later reversed the package, citing it was not in the best interest of the shareholders.
Now, Tesla’s board is presenting the compensation package for a second shareholder vote at the company’s upcoming annual general meeting, aiming to demonstrate shareholder support.
