The CEO of the California Public Employees’ Retirement System (CalPERS) announced plans to vote against Tesla CEO Elon Musk’s $56 billion compensation package.
CalPERS, the largest U.S. pension fund and one of the top 30 investors in Tesla with 9.5 million shares according to LSEG data, previously voted against Musk’s stock options package in 2018. This year, Tesla’s shares have fallen nearly 28%.
Tesla’s annual shareholder meeting on Thursday will serve as a litmus test for Musk’s leadership as analysts expect the company to post its first annual sales drop. Meanwhile, Musk is attempting to shift focus to self-driving technology.
CalPERS CEO Marcie Frost expressed concerns about concentrating a large award on a single individual, stating that it would strengthen Musk’s shares at the expense of diluting the value of shares belonging to other shareholders.
In contrast, Florida’s pension board supported the $56 billion pay package, praising its “very high levels of pay-for-performance.” On its website, the Florida State Board of Administration also stated it voted against Tesla director Kimbal Musk, citing independence concerns, and opposed Tesla’s proposed re-domestication to Texas. With 2.89 million Tesla shares, the agency ranks as Tesla’s 80th largest investor.
In January, a Delaware judge rejected the record compensation package, calling it “an unfathomable sum” that was unfair to shareholders, despite their vote in favor of the pay in 2018.
