Tesla accuses advisory firm of ‘scaremongering’ after it urged investors to vote against Musk’s pay package

Tesla was quick to fire back at Glass Lewis after the advisory firm encouraged shareholders to vote against the company’s $55 billion compensation plan for Elon Musk.

In a letter to shareholders on Wednesday, Tesla slammed Glass Lewis, accusing the firm of “scaremongering” and faulty reasoning.

Tesla’s response to Glass Lewis was clear and direct. The company pointed out that the advisory firm’s report was lacking in key considerations, relied on faulty logic, and was filled with speculation and hypotheticals. In a letter to investors titled ‘What Glass Lewis Got Wrong About Tesla,’ Tesla laid out its case against the firm’s claims.

Glass Lewis’ claims, presented in a 71-page report published on Saturday and first reported by Bloomberg, were significant. The firm deemed Musk’s pay package ‘excessive’ and advised investors to reject Tesla’s bid to move its incorporation from Delaware to Texas. Tesla, in turn, took these claims head-on.

In response, Tesla called the firm’s claim that rescinding the award is acceptable “absurd.” The company called Glass Lewis’ concerns regarding moving the company’s state of incorporation to Texas “scaremongering.” It took issue with the firm’s worries about Musk’s commitment level to the company, saying its CEO created significant market value for investors between 2018 and 2023.

“Glass Lewis may believe that Elon should have done so with more ‘focus,’ but the fact is that Tesla’s performance speaks for itself,” Tesla wrote. “Stockholders should care enormously about value creation (which Glass Lewis inexplicably ignores), and not about whether Elon’s perceived ‘focus’ was strong enough.”

Tesla is facing mounting pushback from institutional investors. On Wednesday, the CEO of CalPERS, the largest public pension fund in the US, said the fund plans to vote against the pay package. Earlier in May, a group of shareholders filed a letter with the Securities and Exchange Commission calling for investors to vote against Musk’s pay package and the proposal to reelect James Murdoch and Kimbal Musk.

Tesla has been proactive in countering the opposition and promoting its proposal. The company has offered investors the opportunity to tour Tesla’s Texas factory with Musk in exchange for proof of voting ahead of the annual shareholder meeting. Tesla has also emphasized the importance of the compensation plan to its future success and has even invested in advertisements to promote the pay plan.