Columbia Law Professor With Small Tesla Stake ‘Inclined To Vote Against’ Elon Musk’s Pay Plan As EV Giant Is ‘Sort Of Melting Ice Cube’ – Tesla (NASDAQ:TSLA)

Columbia Law Professor With Small Tesla Stake ‘Inclined To Vote Against’ Elon Musk’s Pay Plan As EV Giant Is ‘Sort Of Melting Ice Cube’ – Tesla (NASDAQ:TSLA)


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With Tesla, Inc.’s (NASDAQ:TSLA) all-important annual shareholder meeting just two weeks away, the buzz around the board’s quest to get  CEO Elon Musk’s 2018 pay package ratified is getting louder. A legal expert weighed in on the issues in a media appearance.

What Happened: Columbia Law professor Eric Talley, who has a very small position in Tesla, said he is “inclined to vote against” the EV maker’s board proposals. Speaking at a CNBC interview, Talley said the decision to move to Texas is a difficult one, given there isn’t much developed law in the state.

Voting for Musk’s compensation package is a complicated issue, he said.

“One of the big issues that Tesla is now confronting is that…like much of the EV sector, it’s a sort of a melting ice cube at least currently,” Talley said.

He said margins were thinning, competition from China was heating up and a major political candidate was stating that EVs are not in the future policy — likely referring to former President Donald Trump, the presumptive Republican candidate for 2024.

“So that would make me a little bit queasy as well that clearly had an influence on Glass Lewis,” Talley said. Proxy advisory firm Glass Lewis last week advised shareholders to vote against approving Musk’s pay plan and the billionaire reacted to it with caustic comments against the firm.

Talley also delved into the threat of Musk focusing elsewhere if his pay plan is shot down by shareholders.

“Even if this vote being put before shareholders is to have legal effect, one of the big requirements behind it is that it has to be uncoerced that the shareholders don’t have to feel like they have a Sword of Damocles hanging over their head in voting to approve or to ratify the compensation,” he said.

The law professor also cautioned that Musk “should tread carefully” and if the shareholder vote comes out in favor of vetting his pay plan, he has to patch up some of the flaws that gave rise to the opinion earlier this year, he added.

See Also: Everything You Need To Know About Tesla Stock

Why It’s Important: Right from the time Tesla first disclosed in its proxy filing that it would ratify Musk’s 2018 pay plan, legal experts have been sounding out that this doesn’t make sense for the company as it will tantamount to paying for past work. Some have even said the proposal may have to be approved unanimously to be successful.

Tesla, its board and Musk himself have been very vocal in canvassing for the successful passage of the proposal. Musk said in a January social-media post that he may want 25% voting rights in Tesla to develop it as an AI & robotics company and if not he would prefer building elsewhere.

Tesla bull and fund manager Gary Black said in a recent post that Musk could redirect his talent and energy to his other companies such as xAI, which recently closed a fresh fundraising, valuing it at a whopping $24 billion. He also warned of talented engineers quitting, potentially derailing the full self-driving technology currently in the supervised stage.

Price Action: Tesla ended Wednesday’s session down 0.32% at $176.19, according to Benzinga Pro data.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read Next: Elon Musk Agrees Tesla Not Merely Automaker: ‘Like Valuing Nvidia Based On..Gaming GPU Segment’

Image made via photos on Shutterstock


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