When investors repeatedly question whether Tesla CEO Musk's compensation is excessive, greater management risks may be brewing, which makes the market particularly concerned about Tesla.
According to federal regulatory documents, eight Tesla institutional investors have announced opposition to the compensation package promised to Musk in 2018, which currently has a total value of approximately $45 billion.
On Wednesday, Marcie Frost, CEO of the California Public Employee Retirement Fund, the largest public pension fund in the United States, also publicly expressed opposition to Musk's compensation package, stating that she will vote against approving the plan at Tesla's shareholder meeting on June 13th.
Other opponents include Amalgamated Bank, the largest union bank in the United States, the New York City Auditor General's Office, asset management firm Nordea, Danish pension fund AkademikerPensions, and investment group SOC.
The various protests have caused Musk himself to be in a bad mood recently. On Thursday, Musk posted on X criticizing Tesla's shareholders for approving the compensation plan in 2018, but now they have voted against it, making them shameful and lacking in honor, as they have broken their promises.
Key institutional investors
Glass Lewis, an institutional shareholder service company that represents shareholders in voting decisions, is one of the key institutional investors in Musk's compensation package voting. However, it released a report last Saturday stating that it believed Musk's salary was too high and would pose a risk of diluting equity for existing shareholders. It also opposes the proposal to change Tesla's registered address from Delaware to Texas.
On Wednesday, Tesla responded to Glass Lewis's report, stating that it overlooked key considerations, used incorrect logic, and relied on speculation and assumptions. In fact, Musk brought over $735 billion in market value to Tesla shareholders in less than six years.
It is reported that Tesla Chairman Robyn Denholm and other executives plan to travel around the world in the coming weeks to seek support from Tesla retail shareholders for Musk's compensation package. Currently, retail or individual investors hold approximately 30% of Tesla's equity.
Compared to 2018, Tesla's equity is now mostly concentrated in the hands of institutional investors. Apart from the eight institutional investors who have already announced their opposition, ISS, another major institutional shareholder service company, has not yet expressed its stance. However, in 2018, ISS has voted against this salary plan.
Adam Jonas, an automotive analyst at Morgan Stanley and a renowned long at Tesla, pointed out that when investors question whether the CEO's compensation is too high or too low, it means that Musk may need to pay attention to Tesla more than ever before.
He stated that he will closely monitor the shareholder voting results on June 13th, although it is not yet possible to predict the direction, it is expected that this event may cause significant fluctuations in Tesla's stock price.