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The advisory firm ISS, also known as Institutional Shareholder Services, was once called “ISIS” by Tesla CEO Elon Musk. The firm is now calling for Tesla shareholders to ditch the $56 billion pay package that Musk once won but now is set to be voted on for ratification.
ISS has routinely recommended things for Tesla shareholders that do not necessarily align with the company’s most loyal supporters. In 2021, the firm suggested the EV maker ditch Kimbal Musk and James Murdoch from the company’s board.
Elon Musk replied to our coverage of the suggestions by calling the firm “ISIS,” in reference to the radical Salafi-jihadist terrorist group:
Tesla investors advised to ditch Kimbal Musk, James Murdoch by ISS in Shareholder vote https://t.co/KT9gHZRyEa by @KlenderJoey
— TESLARATI (@Teslarati) September 27, 2021
It is now 2024, and the implications of this Tesla Shareholder meeting are bigger than ever before. Musk was due a $56 billion payday due to tranches reached as Tesla’s frontman but had it denied by a Delaware Chancery Judge.
It is the biggest issue on this year’s agenda, and it could end up being the end of his reign at the electric automaker, the end of Tesla’s incorporation in Delaware, and perhaps a farewell to the company as many know it.
ISS believes Musk’s pay package is “excessive, even given the company’s success.”
The firm wrote in its report:
“In addition, the grant, in many ways, failed to achieve the board’s other original objectives of focusing CEO Musk on the interests of Tesla shareholders, as opposed to other business endeavors, and aligning his financial interests more closely with those of Tesla stockholders.”
It also noted a “lack of clarity” regarding Musk’s future pay.
Other firms, like Glass Lewis, have also suggested shareholders vote against Musk’s pay plan. Meanwhile, there are plenty of others who believe Musk is owed this sum of money, and the sizing of it is irrelevant: he was already awarded this paycheck before it was taken away.
“Egan-Jones believes 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. The firm acknowledges the high compensation level but emphasizes the exceptional performance and unique contributions of Musk to Tesla’s success,” Egan-Jones said in its suggestion.
Do you agree with this move? If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
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