- Elon Musk's $56 billion pay package is way too big, according to Ross Gerber.
- The proposed compensation doesn't square with the stock's "horrendous" performance, he said.
- The longtime Tesla investor said the company needed to draft a new, "fair" pay plan for Musk.
Elon Musk's $56 billion pay package is "outrageous," according to longtime Tesla investor Ross Gerber.
Gerber, who previously ran for a seat on Tesla's board, slammed Musk's proposed pay package ahead of the results of the shareholder vote on the CEO's compensation.
Gerber said Wednesday that the pay is far too generous, especially given Tesla's poor stock performance over the last two years. He added that he would vote against the proposal.
"Now we all have to suffer through this. And the amount of money is outrageous, and on top of the fact that the performance of company has been horrendous over the last two years," Gerber said in an interview with CNBC, later adding that even half of Musk's proposed pay package would still be "outrageous" compensation for Tesla's CEO.
Tesla stock has been volatile since Musk bought Twitter in 2022, Gerber said. Shares are down 28% year-to-date, partly due to weak demand and investor frustration with Musk's other projects, which distract from his duties leading the EV maker, Gerber has previously said.
Investors are voting on Musk's pay package for the second time on Thursday, after previously approving it in 2018. The package was struck down by a Delaware judge earlier this year in an investor lawsuit against Musk and the board of the company.
"The reason the pay package was voted down is because the board of directors at Tesla is an absent board. They're totally negligent, they all work for Elon, and it's not an independent board as required by the exchanges," Gerber said. "There's nobody to blame for this mess but Elon."
Gerber acknowledged that Musk deserves to be paid, noting that his stake in Tesla has earned him a "fortune" over the past 10 years. However, Tesla's board needs to draft a new pay plan, one where shareholders are given the opportunity to negotiate on the amount.
"That's why I'm voting no. I just think that they're just creating more problems, and Elon and his board should work on a fair pay package," Gerber said. "There was no negotiating process at all … He's doing a deal with himself. I'd love to go to my own company and negotiate my own pay package with myself."
Tesla is trying to entice its shareholders to vote on proposals ahead of its annual meeting on Thursday, which include Musk's compensation plan and Tesla's potential move to incorporate in Texas. Shareholders who vote for Musk's pay package have the opportunity to tour Tesla's Texas Gigafactory with Musk and Tesla's Cybertruck designer, according to details on the company's website.