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Tesla Inc. shareholders should turn down a plan to grant Elon Musk a $2.6 billion award, the world’s second-biggest proxy adviser recommended, potentially sapping the company’s effort to assure investors that the co-founder isn’t leaving anytime soon.
The award, which could give Chief Executive Officer Musk an additional 12 percent of Tesla’s shares, is too costly and will dilute other investors, Glass Lewis & Co. said in a report to clients obtained Monday by Bloomberg. Tesla needs majority shareholder approval at a March 21 special meeting to make the grant.
While it’s closely tied to performance, “the package loses sight of the question whether you truly need to put more equity at work for a CEO who already has considerable ownership” and outstanding equity grants, said Aalap Shah, a managing director of compensation consulting firm Pearl Meyer.