Tesla shareholder group SOC Investment Group has urged Nasdaq to formally investigate “and take appropriate remedial action” against the EV maker for its recent $29 billion equity grant to the CEO Elon Musk . According to a Fortune report, the group has written a letter to Nasdaq on August 19 and is addressed to Erik Wittman, deputy general counsel and head of enforcement at Nasdaq. The letter raises concerns about compliance with the CEO’s compensation rules and shareholder transparency.
What Tesla shareholder group states
The SOC group alleges that the Tesla board may have bypassed Nasdaq’s rules when it gave Elon Musk a “ 2025 CEO Interim Award ”. Announced earlier this month, the board granted a $29 billion stock package to Elon Musk, describing it as a "first step, good faith payment". The group argues that this 2025 CEO Interim Award should have been put to a shareholder vote, since Nasdaq rules require such approval when there are major changes to executive pay plans.
“When shareholders voted on the 2019 Plan it is likely that, based on the available disclosures and research, they did not believe they were voting on an equity plan that would cover compensation to Mr. Musk,” the SOC letter notes, adding “precisely because of the ‘truly extraordinary’ nature of the 2018 CEO Performance Award.”
For those unaware, Elon Musk’s 2019 plan was actually based on a $56 billion pay package approved in 2018. Instead of a salary or bonus, Musk was promised stock options only if Tesla’s value and performance hit tough targets. At the time, shareholders were told this would be his only form of pay.
The SOC letter further states that Tesla’s 2019 proxy statement repeated multiple times that the 2019 plan was not intended to cover awards to Elon Musk. It further stated that the proxy advisory firms indicated that the 2018 CEO Performance Award was “intended to be the sole means of compensation for Mr. Musk, relying on the Company’s disclosures.” Therefore, the 2025 CEO Interim Award “appears to expand the class of participants under the 2019 Plan in manner that would be sufficiently material to require a separate shareholder vote.”
The SOC letter urges the American stock exchange to act to “restore ‘the rightful balance between shareholder and management’s interests”.
What Tesla shareholder group states
The SOC group alleges that the Tesla board may have bypassed Nasdaq’s rules when it gave Elon Musk a “ 2025 CEO Interim Award ”. Announced earlier this month, the board granted a $29 billion stock package to Elon Musk, describing it as a "first step, good faith payment". The group argues that this 2025 CEO Interim Award should have been put to a shareholder vote, since Nasdaq rules require such approval when there are major changes to executive pay plans.
“When shareholders voted on the 2019 Plan it is likely that, based on the available disclosures and research, they did not believe they were voting on an equity plan that would cover compensation to Mr. Musk,” the SOC letter notes, adding “precisely because of the ‘truly extraordinary’ nature of the 2018 CEO Performance Award.”
For those unaware, Elon Musk’s 2019 plan was actually based on a $56 billion pay package approved in 2018. Instead of a salary or bonus, Musk was promised stock options only if Tesla’s value and performance hit tough targets. At the time, shareholders were told this would be his only form of pay.
The SOC letter further states that Tesla’s 2019 proxy statement repeated multiple times that the 2019 plan was not intended to cover awards to Elon Musk. It further stated that the proxy advisory firms indicated that the 2018 CEO Performance Award was “intended to be the sole means of compensation for Mr. Musk, relying on the Company’s disclosures.” Therefore, the 2025 CEO Interim Award “appears to expand the class of participants under the 2019 Plan in manner that would be sufficiently material to require a separate shareholder vote.”
The SOC letter urges the American stock exchange to act to “restore ‘the rightful balance between shareholder and management’s interests”.
You may also like
Tories demand crackdown on people playing loud music on public transport
Lesser-known 'masterpiece' on Amazon Prime is 'mix of war film and gangster thriller'
2.2 million sign petition for Indian-origin trucker Harjinder Singh: Support grows for leniency; 45-year sentence looms
Gabriel Jesus drops new Arsenal injury update amid Mikel Arteta return boost
Eberechi Eze explains Tottenham snub in first comments on £67.5m Arsenal transfer
