Major Tesla shareholder opposes Elon Musk’s $56 billion pay package

• The list of Tesla investors who oppose Elon Musk’s multibillion-dollar pay package is growing.
• The chief investment officer of CalSTRS, a major California pension fund, told CNBC that the fund opposes the figure.
• Chris Ailman said Musk needs to focus in on his endeavors. 

Another major Tesla shareholder is publicly opposing Elon Musk’s multibillion-dollar pay package just days before investors are set to vote on the enormous figure ahead of the automaker’s annual shareholder meeting on Thursday.

Christopher Ailman, chief investment officer for the California State Teachers’ Retirement System, told CNBC on Monday that the massive state pension fund is voting no on Musk’s astronomical compensation package. The package, which was worth $56 billion when investors initially voted on it in 2018, was down to about $46 billion as of Friday’s closing price.

“We need to have a serious salary,” Ailman said. “We’ll pay him 140 times the average worker pay. How about that deal? I think that’s more than fair. “

Ailman skewered the record-breaking compensation package as “ridiculous” and “absurd.” A Delaware judge struck down the package in January, calling the final price “unfair” and the process to determine that number “deeply flawed.” Investors are now voting on whether to reinstate the package.

CalSTRS, which represents more than one million public school educators in California, has been a Tesla investor since 2000, when the automaker was based in the Golden State. The pension fund currently holds 4.6 million shares in the company. 

Ailman praised Musk for building Tesla from the ground up but implored the billionaire leader to let professional managers lead the car company while he focuses on his myriad other pursuits. 

“He needs to focus in on, either cars, on X, or on going to Mars. And I think his heart really is in going to Mars,” Ailman said.

Musk did not immediately respond to a request for comment from Business Insider.

Despite Musk’s other endeavors, Tesla remains a car company — and the automaker’s output and stock valuation should reflect that, Ailman said.

“Even if these cars had AI in them, they are not worth 60-times earnings. That is absurd,” he told CNBC.

Ailman critiqued Musk’s board governance at Tesla and the billionaire’s penchant for “temper tantrums” but ultimately said he would be disappointed to see Musk leave the car company. 

“I love the fact that he owns the company. He is the leader. He is the star. He designed the cars,” Ailman told the outlet.

The results of the investor vote will be announced Thursday. One Wall Street analyst told BI this week that the compensation package is likely to fail, which could lead to a drop in Tesla stock. Proxy advisors are recommending investors vote no on the pay package, advice which Tesla’s passive investors — about 20% of investors in total — are likely to follow, Bernstein analyst Toni Sacconaghi told BI. 

Other institutional investors who had already publicly said they were voting no on the deal told BI last week that Musk’s decision to redirect a shipment of highly sought-after Nvidia chips away from Tesla and to X instead solidified their vote.

Regardless of Thursday’s outcome, Ailman said CalSTRS has no plans to sell its Tesla shares, even if Musk continues to reach for the stars.

“He wants to go to Mars,” Ailman told CNBC. “Let’s let him fly away.”