Tesla shareholders call for rejection of Musk $56B pay package

Some Tesla investors are calling on fellow board members to deny CEO Elon Musk’s $56 billion pay package, again.

A group of eight signatories, including Amalgamated Bank and SOC Investment Group, told other shareholders Monday that Mr. Musk’s other business commitments have left Tesla without strong leadership.

“Tesla is suffering from a material governance failure which requires our urgent attention and action,” the group wrote to shareholders.

In their letter, the investors urged shareholders to veto the $56 billion pay package and not reelect board members Mr. Musk’s brother Kimbal Musk and former News Corp. executive James Murdoch. Tesla shareholders are expected to vote on the package again on June 13 during the company’s annual meeting.

Many of Monday’s signatories have a history of going against Mr. Musk’s wishes. Last year, many of the same signatories published an open letter to Tesla, once again arguing that Mr. Musk’s proposed pay package was unreasonable and that the CEO was too distracted by other work.

Tesla’s board first agreed on Mr. Musk’s pay package in 2018, trying it to the company meeting certain goals. If Tesla hit all those aims, he could exercise stock options worth $56 billion.

A few shareholders challenged the pay package in court, claiming the amount was unreasonable. The sided with the shareholders, and a Delaware judge voided the pay package in January. Mr. Musk quickly lashed out at the decision and called for Tesla’s board to vote again on the pay package.

The legal battle over Mr. Musk’s pay package is underscored by economic turbulence at Tesla. The company reported a decline in year-over-year sales in the first quarter and last month announced it would cut 10% of its global workforce.