The former chairman of Tesla’s audit committee and well-known clean technology enterprise capitalist said he wouldn’t support Elon Musk’s $56 billion compensation package and said he understands why other investors would vote against the CEO’s pay proposal next week.
“Look, Elon has done an extraordinary job; he has built one of the most transformative companies of our time. But to ask for a $55 billion raise at a time when the company has missed quarterly numbers, growth is slowing and 15 percent of the workforce has been laid off is, I would say, hubris to say the least.”
This is what Steve Westly sayswho spoke on CNBC on Thursday. He served on Tesla’s board from 2007 to 2010 and is a former controller and chief financial officer for the state of California. Westly has served on the boards of the state’s two largest pension funds, CalSTRS and CalPERS, which invest greater than $500 billion.
The truth is that “a lot of pension funds around the world,” including those in California, “will most likely vote no,” Westly said, adding that “there will be a lot of drama next week and everyone will be on tenterhooks.”
Tesla shareholders will vote in a crucial vote on Musk’s salary package, which is value a maximum of $56 billion. A judge revoked his compensation in January for corporate governance reasons, and Tesla’s board is asking shareholders to ratify it a second time at its annual shareholder meeting next week. The board has also asked investors to support a move of the corporate’s headquarters from Delaware to Texas, where Tesla is headquartered.
Tesla’s investor base consists of a mixture of enormous institutional investors, including The Vanguard Group with 7.2% and Blackrock with 5.9%, in keeping with Tesla’s 2024 shareholder report. Musk also owns a large stake in the corporate, along with a military of smaller retail investors that Tesla courts with ads and events. Investors now post on social media when they’ll vote their shares and offer advice to others on the right way to be certain that they vote in time for the meeting. Other large, distinguished investors have publicly sided with Musk.
Long-time Tesla bull Cathie Wood, posted Thursday at X that “no other executive is as on the side of shareholders as Musk.” Based on the pay package that might be voted on next week, Musk could have worked without pay since 2018, Wood wrote. Current shareholders may even profit from Musk running Tesla for one more five or more years, said Wood, founder, CEO and chief investment officer of Ark Investment Management.
“How can shareholders reject his compensation package AFTER Elon and shareholders have already taken the risks associated with Tesla’s rise to become the world’s best-selling car? That’s irresponsible!” Wood wrote.
Other investors, nonetheless, are firmly on Westly’s side. The founding father of Westly Group said profitability and growth have slowed since Tesla’s meteoric rise between 2018 and 2021. In addition, shareholders are concerned concerning the company’s ability to deliver a lower-cost Tesla vehicle with fully autonomous driving capability.
“The facts on the ground have changed and I think that’s why shareholders will probably come back with a very different perspective,” Westly said.
According to Westly, it’s unclear whether Musk will stick with the electrical automotive manufacturer if the proposal doesn’t discover a majority.
“If you had asked me a year or two ago whether Elon would leave Tesla, I would have said not in a million years,” he said. “Now that outlook is a little murkier – we’ll see.”
Tesla didn’t immediately reply to a request for comment.
