- A group of Tesla shareholders are urging others to reject Musk's proposed pay package.
- They also want shareholders to vote against the reelection of board members James Murdoch and Kimbal Musk.
A group of Tesla shareholders are urging others to vote against the reelection of Kimbal Musk and James Murdoch to the Tesla Board and reject a plan to give Tesla CEO Elon Musk a hefty pay package.
The letter, made public Monday in an SEC filing, cites concerns that Kimbal, who is Musk's younger brother, and Murdoch, a friend of Musk who has taken vacations with his family, cannot effectively oversee the CEO because of their personal ties. Per the shareholders, they believe there is "ample evidence" that Tesla's entire board of directors is "overly beholden to CEO Musk."
The shareholder letter also cites The Wall Street Journal's reporting on Musk's drug use. Board members, including Kimbal, took drugs with Musk, the Journal reported in February, citing people who witnessed the incidents.
"If Board members are unable to resist pressure to use illegal substances for fear of alienating the person they are obligated to supervise, one can hardly imagine they will stand up to Musk when corporate issues requiring Board input and oversight are at stake," the shareholders wrote.
The shareholder group — which includes New York City Comptroller Brad Lander, SOC Investment Group, Amalgamated Bank, and several other investors — also disapproved of the plan to give Musk a $56 billion pay package. Musk's original pay package, approved by the board in 2018, was struck down by a Delaware judge in January. The judge ruled that Musk's close ties to the board resulted in an "unfair price," Business Insider reported.
Now, the Tesla board is looking for shareholders to approve Musk's pay, though this group opposes the idea. The group says Musk's controversial X posts have affected the company's bottom line. They also cite Musk's legal troubles, including a class action lawsuit from 6,000 Black employees who say they've faced racial discrimination working for Tesla, and reports of workplace safety issues at his factories.
"Even as Tesla's performance is floundering, the Board has yet to ensure that Tesla has a full-time CEO who is adequately focused on the long-term sustainable success of our Company," the investors wrote.
Shareholders are set to vote on Musk's pay package, along with the other proposals, on June 13.
Representatives for Murdoch, Kimbal Musk, and Elon Musk did not immediately respond to a request for comment from Business Insider.