The $283.9B New York State Common Retirement Fund (NYSCRF) is planning to vote against Tesla Inc.’s proposed trillion dollar pay package for Elon Musk, its chief executive officer, at the next shareholders’ meeting coming up in November.
In an open letter to fellow Tesla shareholders, New York State Comptroller Thomas DiNapoli urged them to reject Musk’s proposed trillion-dollar pay package, citing its lack of defined goals. He noted that the package is excessive, dilutive to shareholders, and grants the board unwarranted discretion. DiNapoli also urged shareholders to vote against all directors standing for reelection at Tesla’s Nov. 6 annual meeting, citing the board’s failure to provide independent oversight and accountability.
DiNapoli further encouraged shareholders to support his proposal to amend the electric-vehicle manufacturer’s new bylaw that would restrict shareholder derivative lawsuits, calling the bylaw an attempt by the board to shield itself from potential legal accountability.
“This unilateral bylaw change means only Elon Musk and a handful of the largest asset managers could ever meet the threshold — effectively insulating Tesla’s officers and directors from legal accountability, no matter how serious or widespread the misconduct.”
He added that Musk’s current “significant stake in Tesla has failed to focus his attention on the company,” and said Tesla’s shareholders cannot trust the current board to design sound pay practices based on its past record. DiNapoli also questioned the board’s ability to exercise independent judgment and accountability, citing brand reputation and stock volatility as governance failures.
“Elon Musk’s latest pay proposal is indefensible in both scale and design,” said DiNapoli in a press release. “It would hand him another massive fortune while severely watering down the holdings of every other shareholder. This pay proposal is not pay for performance — it’s pay for power. . . .”
During the 2024 proxy season, the NYSCRF cast 29,681 votes on ballot items at 3,228 company meetings. In an email to Markets Group, a company spokesperson noted the fund voted against 39% of all shareholder and management proposals in 2024.
