June 22, 2020
Tesla & ISS’s Excessive Director Pay Policy
– Lynn Jokela
Last year, Liz blogged about how ISS would analyze “outliers” for its voting policy on director pay. Under the policy, if ISS identified a company as having high director pay for two or more consecutive years without a compelling rationale, ISS would recommend shareholders vote against directors responsible for setting director comp. According to a NY Times article, it sounds like Tesla is one company where ISS has applied it’s new non-employee director pay policy as it’s recommending shareholders vote against Tesla’s Chairwoman, Rhonda Denholm.
The article also cites an increase in shares pledged by Tesla’s directors and executives as a concern – it says over 10% of shares outstanding are pledged. Tesla’s annual shareholder meeting is scheduled for July 7, but Elon Musk tweeted Friday evening that it would be delayed due to social distancing concerns. Musk tweeted again Sunday evening saying the meeting has been tentatively set for September 15.
The news of ISS recommending against Denholm probably won’t garner as much attention as recent news about Elon Musk’s big payday. Just a couple of weeks ago, Musk received a tranche of options to purchase Tesla shares when certain operational goals were met – his potential gain has been pegged at around $770 million.