Another top proxy firm is urging Tesla shareholders to vote against Elon Musk’s multibillion-dollar pay package.
In a report, Institutional Shareholder Services said Musk’s pay package was excessive and “outsized from the start.” The opposition follows a similar recommendation days ago from proxy firm Glass Lewis.
Tesla shareholders in 2018 approved Musk’s compensation but a Delaware court struck it down in January, saying the approval process had been deeply flawed. Shareholders on June 13 are set to revote on the pay package, once valued as high as $55.8 billion. The automaker has been trying to persuade shareholders to approve the compensation.
ISS said it was concerned that Tesla’s board was only offering shareholders an all-or-nothing option for the pay package.
“Some investors may find the board’s argument compelling, that it would be unfair for CEO Musk not to receive the award,” ISS said. “However, the concerns raised, both back in 2018 and in the interim, have not been sufficiently mitigated.”
Tesla didn’t immediately return a request for comment Friday.
Recommendations from proxy advisers can influence shareholder votes because institutional shareholders look to them for advice. Tesla blasted Glass Lewis earlier this week after the firm recommended shareholders vote against Musk’s pay package.
“Tesla believes it should abide by its commitment to Elon as Elon delivered on this commitment to Tesla,” the company said. “A deal is a deal.”
ISS issued recommendations for other votes at Tesla’s meeting next month. The firm recommended shareholders vote to re-elect board director Kimbal Musk, Elon Musk’s brother, and against re-electing board director James Murdoch.
ISS said Murdoch, who is on Tesla’s audit committee, had a significant number of pledged shares which raised concerns about his ability to oversee risk at the company.
ISS supported Tesla’s aim to leave Delaware and incorporate in Texas. Glass Lewis advised against the move.
Write to Alyssa Lukpat at alyssa.lukpat@wsj.com