New Delhi, May 27: Elon Musk, the CEO of Tesla, is facing a significant challenge as a proxy advisory firm, Glass Lewis, has urged Tesla shareholders to reject the USD 56 billion pay package. This package, if approved, would be the largest pay deal for a CEO in corporate America.

According to a report of Reuters, Glass Lewis has advised Tesla shareholders to reject Elon Musk's USD 56 billion pay package. Glass Lewis's advice could influence the upcoming vote at Tesla's annual stockholder gathering. The Glass Lewis, in its recommendation, it mentioned several reasons like the enormous magnitude of the pay agreement, concentrated ownership and dilution upon exercise among others. The company also cited a number of Elon Musk's time-consuming projects, including his acquisition of Twitter, which is now known as X. Elon Musk’s AI Company xAI Raises USD 6 Billion To Boost Research and Development of Future Technology.

In 2008, Elon Musk took over as CEO of Tesla. Over the past few years, he's steered the firm to better outcomes from a 2.2 billion dollar loss in 2018 to a USD 15 billion profit margin. The original pay deal was voided by a Delaware court in January and then Elon Musk started proceedings to relocate Tesla's domicile state from Delaware to Texas. Glass Lewis, too, criticised this proposed move to Texas as it would have "uncertain benefits and additional risk" for shareholders. Elon Musk Plans xAI Supercomputer To Power Grok’s Next Version; Check Details.

Shareholders have been urged by Tesla to restate their approval of the compensation plan. Robyn Denholm also said that Elon Musk should be rewarded with this pay package because the company met expectations regarding revenue and its stock price targets. The close affiliation between Tesla's board of directors and the billionaire has been also criticisedThe pay package does not involve a salary or cash bonuses but it instead bases its rewards on Tesla's rising market value. Currently, the company is valued at approximately USD 571.6 billion.

(The above story first appeared on LatestLY on May 27, 2024 08:05 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website