Shareholders urged to veto US$2.6b Musk award plan

SAN FRANCISCO: Tesla Inc shareholders should turn down a plan to grant Elon Musk a US$2.6 billion (RM10.16 billion) award, the world’s second-biggest proxy adviser recommended, potentially sapping the company’s effort to assure investors that the cofounder isn’t leaving anytime soon.

The award, which could give chief executive officer Musk an additional 12 per cent of Tesla’s shares, was too costly and would dilute other investors, said Glass Lewis & Co in a report to clients obtained on Monday.

Tesla needs majority shareholder approval at a March 21 special meeting to make the grant.

“Any relative comparison of the grant’s size would be akin to stacking nickels against dollars,” said Glass Lewis in the report, questioning why Musk would need one of the largest equity awards in history to keep him fully focused on the business.