Tesla claps back at adviser criticizing Elon Musk’s stock options

In a 71-page report published over the weekend, proxy adviser Glass Lewis encouraged shareholders to vote against Musk’s pay package, in part because of its “sheer size” and the dilutive effect on current shareholders that would take place if Musk exercised his stock options. The proxy adviser, which gives recommendations to institutional investors on how to vote at annual shareholder meetings, also said it was concerned about Musk being distracted from his focus on Tesla because of responsibilities at his other ventures, including social media company X.

Tesla shot back at the proxy adviser in a Thursday letter titled “What Glass Lewis Got Wrong About Tesla.” In response to Glass Lewis’ concerns over the skyrocketing value of Musk’s shares, his focus and commitment to Tesla, and the “excessive” size of his compensation, the EV maker repeatedly points to the more than $735 billion in value Tesla has gained in under six years.

Moreover, the company wrote that giving Musk his multi-billion-dollar payday was the right thing to do. 

“Tesla believes it should abide by its commitment to Elon just as Elon delivered on this commitment to Tesla. A deal is a deal. That is the fair and ethical thing to do,” the letter reads.

Musk’s pay package was originally approved by shareholders in 2018 but was struck down by a Delaware judge who, in part, cited concerns over the independence of Tesla’s board of directors when it approved the compensation plan. In April, the company said it would once again put Musk’s pay package to a vote at June’s annual meeting. It is also asking shareholders to approve the company moving its incorporation to Texas from Delaware, a proposal that came after Musk’s pay package was voided by the judge in January.

Although company proposals often pass with overwhelming numbers at the annual shareholder meeting, some large investors are opposed. On Wednesday, the California Public Employee Retirement System (CalPERS) said it would vote against the pay package. Last week, a group of investors including the New York City pension funds also recommended shareholders withhold support from the proposal, Fortune reported. 

Still, Tesla has pushed hard to convince shareholders to approve the pay proposal at the June annual meeting, including through advertisements, a website, and a video from board chair Robyn Denholm. Musk, himself, is offering a tour of the company’s Texas production lines for the Cybertruck and Model Y to a dozen shareholders who vote yes on his pay package.

Tesla did not immediately respond to Fortune‘s request for comment.

In the EV maker’s letter filed Thursday, it emphasized that approving Musk’s pay is appropriate for the billions in value growth he has helped the company achieve. 

“Elon was fully prepared to earn nothing if he failed stockholders,” the letter read. “But he did not fail stockholders. He delivered. In fact, he delivered more value than expected in half the time allotted.”