Shareholders of Tesla Inc. have expressed concerns over a very hefty award to be granted to CEO Elon Musk. If he doesn't receive the proposed $2.6 billion award, the risk of the company’s efforts assuring investors that he won’t leave anytime soon could be wasted. The grant might prove to be too costly to investors, as they’re wary of what such an enormous amount of money would do to their stake in the company.
If given the award, Musk is set to gain an additional 12 percent of Tesla’s shares, which would ultimately dilute other investors, according to Glass Lewis & Co. Tesla will need majority shareholder approval at a March 21st special meeting in order to make the grant. In a February 28th report, Glass Lewis questioned the reasoning behind why Elon Musk would need such a large equity award in order to keep him fully focused on the business. They contended, “any relative comparison of the grant’s size would be akin to stacking nickels against dollars.”
Many in support of the compensation plan take it as a signal that Musk will indeed remain at Tesla and that his other ventures won’t take priority
In a February call with market analysts, Musk said,“I expect to remain CEO for the foreseeable future… there are no plans to make a change at this time.” He repeatedly rejects any notion of him leaving the company completely for any of this other ventures like Space Exploration Technologies Corp., or Boring Co. Still, stockholders continue to worry as they feel the newly proposed compensation package is going to do them more harm than good. Truly, only time will reveal what the grant will mean for Tesla, and where Musk’s focus will end up.
