Tesla CEO Elon Musk’s pay package is getting pushback from a big bloc of politically-minded shareholders: Democratic state and city treasurers.
The officials — from seven states and New York City — manage pension funds that hold hundreds of millions of dollars of Tesla stock. They say the company’s proposal to award Musk with a unprecedented $1 trillion compensation plan is a bad deal.
“We are concerned that the [Tesla] Board remains fixated on pleasing Mr. Musk, rather than responsibly addressing his many varied pursuits, at least some of which have come at the expense of Tesla shareholders,” the officials wrote in a letter earlier this month to shareholders.
It is unclear how the letter will affect Tesla’s shareholder vote on Nov. 6. State pension funds are only a tiny fraction of Tesla’s enormous shareholder base, and most analysts expect the board’s package to be approved.
But the fight highlights liberal animosity toward Musk, who founded the Department of Government Efficiency and until earlier this year ran President Donald Trump’s efforts to slash the federal workforce and dismantle agencies.
Musk’s role in the Trump administration prompted boycotts and contributed to stagnation in Tesla’s electric car sales. Since then, Musk has repositioned Tesla as a maker of humanoid robots and robotaxis, but most of the company’s revenue still comes from making electric vehicles. The automaker faces challenging markets as competitors in Europe, China and the U.S. encroach on its sales.
Laura Montoya, the state treasurer of New Mexico, said the Tesla stock is on her “caution list.”
The state holds $143 million in Tesla stock in its sovereign wealth account, and another $75.5 million in its pension plans that provide retirement income for public employees. Montoya said she hasn’t decided whether the state should move away from Tesla stock, but she’s watching — and next month’s vote on Musk’s pay package could make a difference.
“My responsibility is to the people of New Mexico, and our investments should align not just with the fiduciary performance but with New Mexico’s values,” said Montoya.
Nothing to do with DOGE?
The Democratic treasurers — from Nevada, Massachusetts, Vermont, New Mexico, Maryland, Connecticut, Colorado and New York City — want Tesla’s shareholders to unseat three board members they consider too close to Musk. They claim that several benchmarks the board set for Musk’s pay package are too vague and easy for Musk to meet. And they say that the enormous blocs of stock allocated to Musk dilute the value of existing shareholders’ stakes in the company.
In April, when DOGE was at full steam and gutting of the U.S. Agency for International Development, a similar group of blue-state treasurers wrote to Tesla’s board chair, Robyn Denholm, asking whether Musk was spending enough time at Tesla and whether his compensation package was “aligned with shareholder value.”
But the treasurers say the latest letter was with retirees, not DOGE, in mind.
“It doesn’t have to do with his relationship with the president,” said Brooke Lierman, Maryland’s comptroller, who is vice chair of the board that oversees the state’s pension fund and its $175 million position in Tesla. “It has to do with the role of the CEO and his relationship with the stock.”
The Democratic fiscal clarion call comes amid a surge of national activism by state treasurers.
This summer, 26 Republican state finance officials sent letters to top banks asking them to abandon climate change and ESG — or environmental, social and governance — factors that the Biden administration had tried to make an integral part of corporate financial reporting. In response, 17 Democratic state officers sent their own letters, asking banks to keep those standards.
