Legal and General Votes Against Elon Musk Tesla Pay Deal Over Time Commitment Concerns

Legal and General, the United Kingdom’s largest investment institution, cast a vote against Elon Musk’s record one trillion dollar Tesla pay package over concerns regarding the absence of explicit requirements for his commitment to the company. The stewardship officials at Legal and General, which holds eight point six billion dollars in Tesla stock, indicated their opposition stemmed from both the scale of the proposed award and the lack of formal arrangements to guarantee that Musk prioritises Tesla over his other ventures.

The Tesla board had presented the package as a necessary incentive to retain Musk’s focus, but the agreement offered no assurance that he would not dedicate a significant portion of his time to external interests such as X, the social media platform, or SpaceX, the aerospace company. Legal and General, responsible for managing one point one two trillion pounds of assets in the UK, stated that this omission undermined the primary justification provided for the award.

Despite objections from Legal and General, the proposal received over seventy five percent shareholder approval. If performance targets are reached, the package would grant Musk nearly one trillion dollars in free shares, potentially increasing his stake in Tesla from fifteen point three percent to about twenty nine percent. The vote saw Legal and General join other dissident shareholders, including Schroders and the Universities Superannuation Scheme, while Baillie Gifford supported the deal, arguing it aligns rewards with long term shareholder interests.

An internal report at Legal and General described the pay opportunity as extraordinarily high and suggested that successful implementation could reduce Musk’s accountability to investors. The report also warned that it would limit the board’s flexibility to adjust compensation levels should unforeseen circumstances or strategic changes arise.

Proxy voting agencies advising on corporate governance opposed the deal as well, citing concerns on excessive executive pay. Legal and General has established a record of challenging what it considers disproportionate remuneration, having voted against pay resolutions at other major corporations and having criticised the frequent use of corporate jets by executives at underperforming firms.

Elon Musk remains the world’s richest individual, with Bloomberg estimating his net worth at four hundred seventy three billion dollars. Debate around his compensation continues among institutional investors and governance consultants, highlighting ongoing scrutiny of executive pay in the international capital markets.