California pension fund opposes Tesla paying Musk $50 billion

The powerful California teachers’ pension fund (CalSTRS) revealed this Monday that it will vote against the proposal to award Tesla’s CEO, Elon Muska compensation package valued at more than US$50 billion.

In statements to the CNBC network, the investment director of CalSTRS, Chris Ailmandescribed the package, in the form of options on Tesla shares, agreed between the Tesla Board of Directors and Musk in 2018 as “ridiculous”.

Ailman He stated that the fund already opposed the payment the first time it was presented in 2018 and that it will vote against it again on Thursday when the electric car maker’s general meeting of shareholders meets.

Tesla and Musk decided to present the proposal for approval by the company’s shareholders after a Delaware judge annulled the agreement in February at the request of a small investor on the grounds that it was excessive and that the directors who decided on it were not really independent.

The manager of CalSTRS He acknowledged that Musk is responsible for the company that is today Tesla and that it has allowed its shareholders to multiply the value of their investment, but added that the payment of more than US$50 billion was not justified.

“He’s made a lot of money. It’s a car company. You need to have a good salary. We will pay you 140 times the average worker’s salary. I think that’s fair”Ailman stated.

CalSTRSwith a portfolio of some $332.5 billion in investments and the second-largest public pension fund in the United States, joins other large investors and voting advisory companies that have expressed their opposition to the compensation package payment in recent weeks. .

Institutional Shareholder Services (ISS) and Glass Lewis, two US advisory agencies, already indicated at the end of May that their recommendation is that shareholders vote against.

Another California pension fund, CPERS (with $501.63 billion, making it the largest public pension fund in the United States), and Norway’s sovereign wealth fund have also expressed their opposition.

For its part, tesla and Musk They have mounted a public campaign to get small investors to mobilize and approve the payment.

Saturday, Musk noted on social media that 90% of individual shareholders who have already voted have done so in favor of approving the agreement.

Approval of the deal would also mean that Musk would get closer to his goal of controlling 25% of the company’s shares.

Currently, the controversial businessman holds 12.9% of the company’s shares and, if shareholders approve the payment next Thursday, the proportion could reach more than 22%.

Under the 2018 deal, Tesla would compensate Musk for his work with a package of stock options if the company met 12 goals, including a market capitalization of at least $500 billion and certain revenue targets. All objectives were met.