Former Tesla board member says he wouldn't vote for Musk's $56 billion pay package
What reasons did Steve Westly give for opposing Elon Musk's $56 billion pay package proposal?
Steve Westly, Tesla's former audit committee chair, opposed Elon Musk's $56 billion pay package proposal for several reasons. Firstly, he believes that asking for such a significant pay increase at a time when the company has missed quarterly numbers, growth is slowing down, and 15% of the workforce has been laid off is an act of hubris. Secondly, Westly argued that an awful lot of the world's pension funds, including those in California, are highly likely to vote against the proposal. Lastly, he mentioned that the facts on the ground have changed, with profitability and growth slowing down from Tesla's meteoric rise between 2018 and 2021. Shareholders are also worried about the company's ability to deliver a lower-cost Tesla vehicle and full self-driving capability.
What are the concerns related to governance that led to a judge rescinding Musk's compensation in January?
In January, a judge rescinded Elon Musk's $55 billion pay package due to concerns related to corporate governance. The concerns stemmed from the potential conflicts of interest and the influence of Musk on the compensation process. The judge found that the pay package was unfair based on Musk's role in the compensation process and the potential value of the package1. This decision followed a five-day bench trial in the Delaware Court of Chancery1. The court's ruling highlighted the potential for increased scrutiny on CEO and executive compensation, as well as the importance of ensuring fairness and independence in the decision-making process.
How did Steve Westly describe the timing of Elon Musk's request for the pay increase?
Steve Westly described the timing of Elon Musk's request for a $55 billion pay increase as having "hubris." He pointed out that the request comes at a time when Tesla has missed quarterly numbers, growth is slowing down, and the company has laid off 15% of its workforce. Westly, a former Tesla board member and prominent clean technology venture investor, said he wouldn't back the pay package and understands why other investors might vote against it.