WionDrive News Desk 
The California State Teachers’ Retirement System has emerged as the latest investor to declare its intention to vote against the USD 56 billion pay package proposed for Tesla CEO Elon Musk. This announcement was made by the pension fund’s chief investment officer in an interview with CNBC on Monday, just days before a pivotal shareholder meeting scheduled for Thursday.
This shareholder meeting represents a critical juncture for Musk’s leadership, especially as investors have begun to question the outlook for the electric vehicle maker amidst slowing sales and Musk’s efforts to shift the company’s focus toward achieving a breakthrough in artificial intelligence.
Musk is banking on a groundswell of support from retail investors to approve the pay package, which stands as the largest in corporate America. This comes after a Delaware judge nullified the previous 2018 agreement, citing concerns that it appeared to have been negotiated by a board of directors beholden to Musk.
Thus far, influential investor advisory groups such as Glass Lewis and ISS have voiced their opposition to the new pay deal, and several institutions have also indicated that they will vote against it. Bernstein analysts have noted in a recent report that the package is unlikely to pass, as it would require a substantial percentage of outstanding votes to secure investor approval.
As CFRA Research senior equity analyst Garrett Nelson cautioned, “If the pay package were to be voted down, we believe it could increase uncertainty regarding the future leadership of the company and jeopardize the ‘Musk premium’.”
The proposed pay deal would grant Musk roughly 20 per cent control in Tesla, and he has argued that he needs even more control over the company. Notably, the package does not include a salary or cash bonus and instead sets rewards based on Tesla’s market value reaching as high as  USD 650 billion over 10 years from 2018.
While CalSTRS did not immediately respond to a request for comment from Reuters, Norway’s USD 1.7 trillion sovereign wealth fund stated on Saturday that it would vote against ratifying Musk’s compensation package. Conversely, the Baillie Gifford-managed Scottish Mortgage Investment Trust said last month that it plans to continue supporting the pay package.
In addition to the compensation proposal, New York City Comptroller Brad Lander, who oversees public pension funds, and fund consultant SOC Investment Group have expressed their opposition to the USD 56 billion compensation package. They have also voiced their objection to the re-election of directors Kimbal Musk and James Murdoch to the board.
Furthermore, Tesla is proposing to reincorporate in Texas instead of Delaware and to re-elect two directors, including Musk’s brother, Kimbal.
As this pivotal shareholder meeting approaches, the outcome will have significant implications for Elon Musk’s leadership and the future direction of Tesla, particularly in light of the concerns raised by various influential investors and advisory groups regarding the proposed pay package and the company’s governance.
