Aly Song / Reuters

Tesla shareholders advised to dismiss Ilon Mask, so as not to pay $ 55 billion

Tesla investors are encouraged to vote for the dismissal of CEO Elon Musk from the company’s board of directors, as there is growing discontent over the deal on his bonuses, which could lead to a record $ 55.8 billion payout to the CEO.

Aly Song / Reuters

Pirc, an influential adviser to shareholders, including UK pension funds, on Tuesday recommended that investors vote against Tesla’s executive compensation agreement, as it unfairly enriches the CEO.

Pirc believes that the payment could lead to legal action against the company: “The board of directors, including CEO Ilon Musk, has been rewarding themselves with excessive compensation packages over a three-year period that allow management to enrich themselves at the expense of the company”.

The adviser company called on investors to vote against the re-election of Elon Musk to the board of directors because of the agreement on the payment of remuneration, and warned that it poses a serious risk of damage to the reputation of the company and its shareholders. Pirc also recalled that Mr. Mask’s frequent controversial statements on Twitter cost Tesla millions of dollars and also resulted in unnecessary reputational costs.

Last year, Mr. Mask was sued for $ 190 million for defamation and humiliating tweets about the British caver Vernon Unsworth, who helped save 13 people who got into the Thai cave. The jury ruled that the tweets did not reach the legal level of defamation, and Elon Musk was not held liable for the damage.

Stephen Lam / Reuters

In 2018, the U.S. Securities and Exchange Commission (SEC) fined Ilon Mask and Tesla $ 20 million for tweets in which he wrote about plans to turn the company into a private company – this led to a significant increase in the stock price. As part of the settlement of the dispute with the SEC, Mr. Musk was forced to resign as chairman of the Tesla board of directors. Pirc noted that the episode triggered allegations of stock market abuse, and the SEC claimed that Elon Musk lied to investors.

Pirc also recalled problematic tweets by Elon Musk, who refused to take action to combat the pandemic at first: “Mr. Musk was a clear opponent of quarantine measures against Covid-19 and was reportedly demanding that employees return to work during quarantine, without sufficient precautions and protection, even despite protests from workers. This problem intensified when it became known that several Tesla employees tested positive on covid-19 after returning to work “.

Investors were also called on to vote against the re-election of Robyn Denholm as chairman of the Tesla board of directors. She succeeded Ilon Mask when he was forced to resign in November 2018. Pirc believes that she should resign because of her previous role in approving an overpayment agreement to Ilon Mask. Tesla’s general annual shareholders meeting was due July 7, but the company postponed the vote until Sunday on Sunday.

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