US labor, advocacy groups urge states to reject Tesla's $29 billion Musk pay

A coalition of U.S. labor unions and progressive advocacy groups urged state financial officers overseeing public pension funds to oppose fresh pay awards for Tesla CEO Elon Musk, warning the excessive cost poses risks to workers' retirement savings.

A mix of labor unions and liberal advocacy groups, including the American Federation of Teachers and MoveOn, urged state officials to press asset managers to reject Musk's new pay plans and push for stronger board independence at the EV maker, in a letter exclusively shared with Reuters.

Many states manage pension funds for teachers and other employees, which are among the largest U.S. investors.


Tesla and Musk did not immediately respond to requests for comment.

The appeal comes amid a legal saga over Musk's record pay package. In January last year, Delaware Chancellor Kathaleen McCormick voided Musk's 2018 package, then valued at about $56 billion, calling it an "unfathomable" award by a conflicted board.

Tesla this month granted Musk 96 million new shares valued at about $29 billion as a good-faith interim payment while his 2018 pay package remains under appeal.

The Tesla board said to shareholders that retaining Musk is essential, as his leadership is critical for the company's transition from an EV maker to a robotics and AI-focused firm.

In June last year, Tesla shareholders ratified the payout and approved relocating the company's legal home to Texas, but the court case remained unresolved, with McCormick later allowing for appeals that could extend for months.

The groups urged officials to oppose any new pay package and to vote against directors who fail to show independence from Musk.

"Shareholders in Tesla shouldn't be taking dilutions so that the wealthiest man in the world can be handed additional Tesla shares," some of the advocates said via email.

Tesla has not yet published a proxy outlining the ballot items at the next annual meeting, but the groups expect the issue to be included.