Tesla leads charge to defend Elon Musk's $56bn pay package

Core Viewpoint - Tesla's shares have declined by 28% this year, with warnings of slower growth due to falling sales in China and a product recall, yet the company is pushing for a record-breaking $56 billion pay package for CEO Elon Musk, which is not tied to current or future performance [1][2][4] Group 1: CEO Compensation - Elon Musk's pay package, the largest ever for a US-listed company, was granted in 2018 based on ambitious targets for stock value, revenue, and profitability, all of which were met by 2022 [1][2] - A Delaware court recently voided Musk's pay arrangement, labeling it "an unfathomable sum" and questioning its necessity for retaining him as CEO [2] - Tesla is urging shareholders to re-approve Musk's pay, framing the vote as a referendum on the company's current state and Musk's leadership [2][3] Group 2: Shareholder Sentiment - Tesla's chair, Robyn Denholm, emphasized that Musk has not been compensated for his contributions over the past six years, arguing that the court ruling was unfair and inconsistent with shareholder wishes [2][3] - Analysts predict that Tesla will likely secure approval for Musk's remuneration, although not by a wide margin, as many shareholders recognize Musk as the company's biggest asset [4] - Two major proxy advisory firms have opposed Musk's pay, describing it as excessive, which has led to backlash from Tesla [4] Group 3: Future Implications - The vote on Musk's pay will also test the influence of proxy advisers over Tesla, which has a strong base of loyal supporters [4] - Musk has launched a campaign to secure support for the pay package, warning that future growth is at stake [5] - Despite potential approval, challenges from shareholders opposing Musk's pay deal are expected to continue [6]