The vote on the proposed $56 billion CEO bonus for Tesla CEO Elon Musk is scheduled to take place at the upcoming general meeting. NBIM, one of the world’s largest investors and owner of almost one percent of Tesla, opposes Musk’s compensation package and believes it is excessive. This disagreement has caused tension between Musk and NBIM, highlighting the importance of corporate governance and executive compensation in large companies like Tesla.
Despite a Delaware court decision earlier this year that invalidated Musk’s incentive package, citing lack of investor awareness of its terms, Musk has threatened to take his ideas to another company if he is not allowed to increase his ownership stake in Tesla according to the terms of his agreement. In 2018, NBIM opposed the incentives and continues to express their disapproval of Musk’s compensation system.
The future of Tesla hangs in the balance as questions arise about what would happen if Musk builds new products outside of the company if his ownership stake is not increased according to his agreement. The tension between Musk and NBIM serves as a reminder that proper corporate governance and executive compensation are crucial for large companies like Tesla.
