WionDrive News Desk 
The California Public Employees’ Retirement System (CalPERS), one of the largest investors in Tesla, has announced its intention to oppose the USD 56 billion pay package awarded to the company’s Chief Executive Officer, Elon Musk. CalPERS’ CEO, Marcie Frost, expressed the agency’s stance in an interview with CNBC, stating, “We do not believe that the compensation is commensurate with the performance of the company.”
CalPERS holds a significant stake in Tesla, owning 9.5 million shares, making it one of the top 30 investors in the electric vehicle manufacturer. The U.S. pension fund’s decision to oppose Musk’s pay package carries weight, given its substantial investment in the company.
Musk, known for his active presence on social media, responded to Frost’s comments by taking to the platform X (formerly Twitter). In his post, he accused CalPERS of “breaking the deal,” stating, “What she’s saying makes no sense, as all the contractual milestones were met. CalPERS is breaking their word.”
The debate over Musk’s pay package has been ongoing, with proxy advisory firm Glass Lewis urging Tesla shareholders to reject the compensation plan last Saturday. Tesla, in turn, responded to Glass Lewis in a separate filing on Wednesday, arguing that Musk is creating wealth for Tesla stockholders and has an extraordinary amount of “skin in the game.”
Musk’s pay package, considered the largest in corporate America, is unconventional in its structure. It does not include a salary or cash bonus and instead sets rewards based on Tesla’s market value rising to as much as USD 650 billion over the next 10 years from 2018. This unique approach has drawn both praise and criticism from various stakeholders.
In January, a Delaware judge rejected the pay package, terming the compensation “an unfathomable sum” that was unfair to shareholders. However, last month, Tesla asked shareholders to reaffirm their approval for Musk’s pay package, which was initially set in 2018.
Amidst the ongoing debate, Egan-Jones Proxy Services, a prominent proxy advisory firm, has recommended that investors vote to ratify Musk’s pay package. In an email sent by a company manager, Egan-Jones stated that “the continuation of this compensation plan is critical for maintaining Musk’s leadership and motivation, which are essential for Tesla’s sustained growth and innovation.”
Egan-Jones also endorsed Tesla’s proposal to transfer its state of incorporation from Delaware to Texas, citing potential operational efficiency and cultural benefits from aligning the company’s legal and operational bases.
As the discussion surrounding Musk’s pay package continues to unfold, it highlights the complex dynamics and differing perspectives surrounding executive compensation in the corporate world, particularly for high-profile figures like Elon Musk, whose leadership and vision are considered integral to Tesla’s success.
