Summary
– CalPERS opposed Elon Musk’s $56 billion pay package but has made 11x on their investment due to his leadership
– Musk criticized CalPERS for not supporting his pay, calling them dishonorable
– CalPERS now owns $1.7 billion worth of Tesla stock
– The $56 billion pay package was previously approved by shareholders in 2018
– Tesla is making efforts to convince shareholders to vote for Musk’s pay package to avoid his potential departure
Article
Elon Musk, the CEO of Tesla, recently criticized a shareholder group, CalPERS, for opposing his $56 billion pay package, despite the fact that their investment in Tesla has multiplied significantly under his leadership. CalPERS owned 183,343 shares of Tesla stock in 2018 when the shares were trading at $14.90. Since then, the price of Tesla stock has increased more than 11 times, resulting in their stake increasing from $40 million to roughly $500 million.
In response to CalPERS not supporting his pay package, Musk tweeted, “CalPERS broke the deal. Shame on them, they have no honor.” CalPERS now owns 6,738,863 shares of Tesla stock, valued at approximately $1.7 billion. The issue of Musk’s compensation is a major topic at the upcoming Tesla Shareholder Meeting, with various firms, shareholders, and investment groups expressing differing opinions.
The $56 billion pay package was initially approved by shareholders in 2018 but was later denied by a Delaware Chancery Court judge earlier this year. This denial has prompted Tesla to consider leaving Delaware and incorporating in Texas. As the vote on Musk’s pay package approaches, there are conflicting views on the matter, with some advocating for his payment to avoid his potential departure from Tesla.
Despite opposition from certain firms, including Glass Lewis, many shareholders believe that since the pay package was previously approved, it should be approved again. To ensure Musk receives his $56 billion, Tesla is employing various strategies, such as offering factory tours with Musk and Chief Designer Franz von Holzhausen, to persuade shareholders to vote in favor of the pay package approval. Shareholders and investors are divided on the issue, with some valuing Musk’s leadership and others raising concerns about the size of his compensation package.
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