Tesla’s Board of Directors Stands Firm Behind Elon Musk Despite Criticism
Facing criticism that it is overly beholden to Elon Musk, Tesla’s board of directors made a bold move on Wednesday by announcing that they would essentially give him everything he wanted, including the biggest pay package in corporate history.
Despite setbacks in court and a decline in the car market, Tesla’s board showed unwavering support for Mr. Musk, risking backlash from activist investors and potential litigation. The decision to ask shareholders to endorse a compensation plan worth about $47 billion for Mr. Musk came shortly after a Delaware judge voided the same pay package, citing excessive compensation and lack of proper disclosure to shareholders.
As Tesla’s sales decline and its stock takes a hit, the board’s move to back Mr. Musk has raised concerns among investors. The company is already facing legal pressure from regulators and customers over issues with its driver-assistance system.
The decision to reinstate Mr. Musk’s compensation plan also comes on the heels of Tesla announcing a 10 percent workforce reduction, adding to the negative optics surrounding the company.
Despite the criticism, Tesla’s board remains steadfast in its support of Mr. Musk, even asking shareholders to approve moving the company’s corporate domicile to Texas from Delaware. The board also seeks to reappoint two directors with close ties to Mr. Musk, further solidifying their backing of the CEO.
While some investors find the timing of the compensation package approval troubling, Tesla’s board maintains that it is essential to honor the promises made to Mr. Musk. The board’s decision is likely to face further legal challenges, but they are determined to stand by their CEO.
As Tesla navigates through these challenges, the board’s unwavering support for Mr. Musk continues to raise questions about corporate governance and transparency within the company. Despite the controversies, Tesla’s board remains confident in the company’s future and its ability to innovate under Mr. Musk’s leadership.
