Tesla Shareholders Express Concern Over Elon Musk’s Influence on Board Members

A group of Tesla shareholders is voicing their opposition to the reelection of Kimbal Musk and James Murdoch to the Tesla Board, as well as a proposed hefty pay package for CEO Elon Musk.

Concerns Over Personal Ties and Independence

The shareholders, in a letter disclosed in an SEC filing on Monday, raised concerns about the personal relationships between Elon Musk and the board members. Kimbal Musk, who is Elon's younger brother, and James Murdoch, a close friend of Musk who has vacationed with his family, are seen as lacking the independence needed to effectively oversee the CEO.

The letter highlights worries that Tesla's board may be too dependent on Elon Musk, with the shareholders alleging that there is significant evidence to support this claim.

Allegations of Drug Use

Furthermore, the shareholder letter references a report by The Wall Street Journal regarding Elon Musk's drug use. According to the Journal's sources, board members, including Kimbal Musk, engaged in drug use with Musk. The shareholders view this behavior as compromising the board's ability to provide proper oversight.

The shareholders expressed concerns that if board members are willing to partake in illegal activities to avoid upsetting Musk, they may not be able to effectively challenge Musk on critical corporate matters.

Disapproval of Musk's Pay Package

In addition to their reservations about the board members' independence, the shareholder group also criticized a proposed $56 billion pay package for Elon Musk. A previous pay package for Musk was rejected by a Delaware judge earlier this year due to concerns about the close ties between Musk and the board.

Despite the prior setback, the Tesla board is seeking shareholder approval for Musk's new pay package. However, the group of shareholders opposing the plan believes that Musk's controversial social media posts have negatively impacted the company's financial performance.

Call for Stronger Corporate Governance

The shareholders highlighted other issues affecting Tesla, including legal challenges and workplace safety concerns. They argue that the board has not taken adequate steps to address these issues and ensure the company's long-term success.

Shareholders are scheduled to vote on Elon Musk's pay package and other proposals on June 13. Representatives for James Murdoch, Kimbal Musk, and Elon Musk have not yet responded to requests for comments.

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By: hgetahun@insider.com (Hannah Getahun)
Title: Tesla Shareholders Express Concern Over Elon Musk’s Influence on Board Members
Sourced From: www.businessinsider.com/tesla-shareholder-group-sec-letter-elon-musk-pay-package-2024-5
Published Date: Tue, 21 May 2024 00:50:44 +0000