Tesla refuses to pay Musk the highest salary, board criticized for close ties with him.

Proxy advisory firm Glass Lewis said on Forex International Currency Trading PlatformSaturday that it recommended Tesla shareholders reject a $56 billion compensation plan for CEO Elon Musk, which, if approved, would be the largest CEO compensation in U.S. corporate history.

The report cited reasons for opposition, including the "excessive scale" of the compensation plan, the dilutive effect after exercising, and ownership concentration. It also mentioned Musk's "time-consuming projects," which have increased due to his high-profile acquisition of Twitter (now called X).

The compensation plan was proposed by Tesla's board, which has been frequently criticized for its close ties with the billionaire. The plan includes no salary or cash bonus but relies on Tesla's market value growing to $650 billion between 2018 and 2028 as the target for rewards. Currently, the company's market value is approximately $571.6 billion, according to LSEG data.

In January, Delaware Court of Chancery Judge Kathaleen McCormick struck down the initial compensation plan. Subsequently, Musk attempted to move Tesla's headquarters from Delaware to Texas.

Glass Lewis also criticized the proposed move to Texas, arguing that it presents "uncertain benefits and additional risks" for shareholders.

Tesla urged shareholders to reaffirm their approval of the compensation plan.

This month, Tesla Board Chair Robyn Denholm told the Financial Times that Musk deserves the compensation plan because the company has achieved ambitious revenue and stock price targets.

Musk became Tesla’s CEO in 2008. In recent years, he has helped the company turn a $2.2 billion loss in 2018 into a $15 billion profit and has increased vehicle production sevenfold, according to online voting site Vote Tesla.

Additionally, the proxy advisory firm recommended shareholders vote against the re-election of board member Kimbal Musk (Musk's brother) while supporting the re-election of former 21st Century Fox CEO James Murdoch.

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