Tesla Inc. (NASDAQ:TSLA) Board of Directors Chair, Robyn Denholm, has criticized proxy advisory firms like International Shareholder Services (ISS) and Glass Lewis for opposing CEO Elon Musk's new compensation award, which could make him a trillionaire.
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‘One-Size-Fits-For-All' Approach Is Misguided, Says Robyn Denholm
In a post on the social media platform X on Tuesday, Tesla's official handle shared the letter Denholm penned to investors of the company in an attempt to defend Musk's pay package and "set the record straight," calling the recommendations of the proxy advisory firms "misguided."
"ISS and Glass Lewis evaluate all companies and all proposals using the same simplistic, one-size-fits-all framework," Denholm said in the letter, adding that advisory firms are "fundamentally unable" to correctly evaluate Tesla, which challenges "the status quo."
"I encourage you to ignore ISS's and Glass Lewis's advice for this year's Annual Meeting and vote with the Board's recommendations on all proposals," Denholm said.
She then went on to address queries about the package, adding that Musk would be paid nothing "unless shareholders enjoy exceptional investment returns," and that Musk would secure additional voting rights "if he delivers on bold market capitalization and operational goals."
It's worth noting that Musk had previously expressed worries regarding voting rights, saying that the compensation package wasn't about money; it was about retaining control over the EV giant.
Also addressing issues regarding relatively easy milestones in the package, which could give Musk billions of dollars even if he failed to reach all the goals laid down in the package, she said that Musk would need to "lead Tesla to $400 billion in Adjusted EBITDA – which means growing our current Adjusted EBITDA by ~26x," reiterating that there were no easy milestones.
"If you prefer that Tesla turn into just another car company mired in the ways of the past, then you should follow ISS and Glass Lewis," Denholm said, appealing to the investors to vote yes on all the board's recommendations if they believed in Musk's leadership.
Experts Weigh In On The Pay Package Row
The letter comes as experts have also weighed in on their views regarding the pay package. Gerber Kawasaki's co-founder, Ross Gerber, recently took to social media to criticize the compensation award, calling it "insanity" and questioning the independence of Tesla's Board.
Meanwhile, Cathie Wood, CEO of ARK Invest and Tesla Bull, defended the compensation award and criticized ISS for its opposition to the package. She also said that Musk's package would "decisively win" at the shareholder meeting.
Elsewhere, Future Fund LLC's managing director, Gary Black, as well as Wedbush Securities' investor Dan Ives, both shared that they expect the new pay package to receive approval from Tesla's shareholders.
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