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Tesla’s timing on Musk $56bn pay package is comically bad

The electric carmaker is the biggest loser in the S&P 500 this year, with shares plummeting 37 per cent

Tesla is once again seeking shareholder approval for a $56 billion pay package for Elon Musk. Photograph: Haiyun Jiang/The New York Times

Proinsias O'Mahony's face
Proinsias O'Mahony
Sat Apr 20 2024 - 06:00

If at first you don’t succeed, try, try again. Tesla is asking shareholders to vote once more on a $56 billion (€52.5 billion) pay package for Elon Musk, the same one a Delaware judge deemed “unfathomable” and struck down in January, citing concerns about fairness to shareholders.

Tesla appears more concerned about fairness to Musk, saying it’s “fundamentally unfair” he hasn’t been paid for his work for the past six years. Yes, poor Elon.

Did Tesla forget Musk sold $23 billion of stock in 2022?

Did it miss Judge Kathleen McCormick’s observation that his stake in Tesla meant he already stood to gain over $10 billion for every $50 billion in market capitalisation increase? Is not being granted the largest compensation plan in history really “unfair”?

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The timing is comically bad, coming days after Tesla announced more than 14,000 job cuts globally. “There is nothing I hate more, but it must be done,” Musk told staff, to keep the company “lean” and “hungry”.

Shareholders, too, should be miffed. Tesla is the biggest loser in the S&P 500 this year, with shares plummeting 37 per cent. Musk, distracted by commitments to multiple other companies and seemingly addicted to scrapping on Twitter/X, hasn’t helped. He may yet get his multibillion-dollar payday, but shareholders should express their frustrations and hold Tesla accountable on pay.

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