NYC comptroller lets rip on Elon Musk’s $47 billion pay plan: ‘There’s rarely been as egregious a flaunting of independent shareholder governance as this’

New York City Comptroller Brad Lander, who oversees five public pension funds with $242 billion in assets, has a message for the Tesla board and CEO Elon Musk: the EV maker is publicly traded, so it should stop behaving like a family-owned business with Musk at the head of the table.

“I don’t know what genuinely independent board would have a CEO who is also CEO of two other large companies,” Lander told Fortune. “Every other major publicly traded company with a genuinely independent board—and many of them with not that independent of a board—expect their CEO to be a full-time CEO for their company.”

Lander and a coalition of seven other investors are urging Tesla shareholders to vote down Musk’s $47 billion stock-option package at the company’s June 13 shareholder meeting. (His pay plan was originally valued at $55.8 billion but it has fluctuated with the company’s stock price performance.) The investors filed a notice this week spelling out a series of concerns about governance at the company, and what Lander called Musk’s “stratospheric” compensation.

One of them is that Musk doesn’t work at Tesla full-time, said Lander, adding that there’s no doubt Musk is distracted by his other companies, which include SpaceX, The Boring Company, xAI, X, and Neuralink. He was also incredulous that the Tesla board, after being served up a rebuke about its independence by a Delaware Chancery Court judge, would again ask investors to approve a compensation plan that will pay Musk billions. Delaware judge Kathaleen McCormick in January rescinded Musk’s pay and ruled that the board, which includes Musk’s brother Kimbal and others with close personal and financial ties to Elon Musk, lacked independence in approving the comp plan and that Musk controlled the process and dictated the terms.

“It takes a lot to get the Chancery Court to say that,” said Lander. “For the board to then turn around and say, ‘We’re ignoring the court and we’re moving forward with this stratospheric pay package and we’re not going to do anything about these distractions’” is beyond the pale.

“I’ve never seen a board just wantonly ignore a court in this way,” he added.

Tesla did not immediately respond to Fortune's request for comment. Tesla Chair Robyn Denholm has pushed back against the court’s ruling and said that it was “BS” that she was too close to Musk to be considered independent.

In Lander’s view, what Tesla does could have implications that spill across other companies and founders who would rather keep close control of their companies while still having access to the capital markets. “This is not shareholder governance as envisioned by shareholder capitalism,” he said.

Americans have been fortunate to have flourishing capital markets for generations because of the model of independent governance in which shareholders can invest and believe that board members will act as their independent representatives in relation to company management teams, he said.

But he warned that isn’t happening at Tesla: “There’s rarely been as egregious a flaunting of independent shareholder governance as this."

And while Lander and the other investors aren’t lobbying to replace Musk, the Tesla CEO is “absolutely” replaceable, said Lander. Still, he would rather see the board negotiate an “appropriate compensation package” with Musk and for Musk to provide the level of attention and focus on Tesla that the job requires.

“He is no doubt qualified to be the Tesla CEO, but CEO succession at publicly traded companies of this scale happens all the time,” said Lander. “There are other CEOs who could do it if this CEO isn’t going to give it his full-time attention and adopt a lucrative but at least vaguely reasonable compensation package.”

This story was originally featured on Fortune.com