Tesla blasts Glass Lewis after adviser seeks rejection of Musk pay package

By Dana Hull
 

Tesla Inc. blasted Glass Lewis Inc. in a letter to shareholders, days after the proxy adviser urged investors to reject a proposed $56 billion pay package for Chief Executive Officer Elon Musk.
 

In the letter titled “What Glass Lewis Got Wrong About Tesla,” the electric-vehicle maker said the adviser “omits key considerations, uses faulty logic, and relies on speculation and hypotheticals.” The company urged shareholders to ignore Glass Lewis’s advice, and vote in favour of Musk’s compensation package and a company proposal to reincorporate in Texas, from Delaware.

“Tesla is one of the most successful enterprises of our time,” the letter, published Wednesday, said. “We have revolutionised the automotive market.”

The EV maker’s board has been working to rally shareholder support ahead of its June 13 annual meeting. The most controversial proposal investors are being asked to weigh is Musk’s large compensation package. The pay deal was initially crafted — and supported by most shareholders — in 2018, but a Delaware judge nullified it earlier this year. In her ruling, she said the board wasn’t transparent enough with investors, and it wasn’t in their best interest.

Over the weekend, Glass Lewis called the payout “excessive” and criticised Musk for committing to run too many ventures at once. In its response, Tesla said the compensation agreement “motivated” Musk to achieve “extraordinary growth.”

“Stockholders should care enormously about value creation,” the Tesla letter said. “And not about whether Elon’s perceived ‘focus’ was strong enough.”

Musk has been a loud critic of companies like Glass Lewis and Institutional Shareholder Services Inc., another influential proxy advisory firm. He posted on social media in January 2023 that too much power is concentrated in their hands, “because so much of the market is passive/index funds, which outsource shareholder voting decisions to them.”

“ISS and Glass Lewis effectively control the stock market,” Musk wrote.

On Wednesday, Musk also slammed Calpers, the largest state public pension fund in the US, after its CEO said she planned to vote against the pay package. In a post on X, Musk accused Calpers of “breaking their word.”