's board, prominent proxy advisory firm Glass Lewis & Co. has urged shareholders to reject the proposed $56 billion pay package for Chief Executive Officer Elon Musk. The firm's recommendation, outlined in a report released on Saturday, cited the "excessive size" of the deal and its potential dilutive effect.

Glass Lewis highlighted that prior to the 2018 grant, Mr. Musk's numerous time-consuming projects unrelated to the company were already well-documented. The situation further escalated with his high-profile acquisition of a company now known as X.

This recommendation by Glass Lewis could potentially sway the vote of large institutional investors at Tesla's upcoming annual meeting on June 13. If the proposal is indeed rejected, Mr. Musk has previously indicated that he might turn his attention towards developing products outside of the electric-vehicle maker.

This is not the first time that shareholders have been presented with Musk's remuneration package. Initially crafted in 2018, the deal was invalidated earlier this year by a Delaware judge who concluded that investors were not provided with crucial details. However, if the Tesla board can demonstrate broad support for the compensation deal, it could aid in the company's legal appeal against the ruling. Conversely, a loss would signify a significant setback and potentially erode investor confidence in Musk's leadership.

It should be noted that the upcoming vote is advisory in nature, which means Tesla has the option to disregard the results. In the past, around three-quarters of investors had supported Musk's pay deal. However, Glass Lewis had recommended opposition, highlighting concerns regarding costliness and the potential dilution of other shareholders' stake.

In an effort to counter public criticism of Musk's compensation, Tesla has launched a campaign to gain shareholder support. Board chair Robyn Denholm has begun reaching out to large institutional investors, while the "Vote Tesla" website has been established to engage the company's large base of retail shareholders.

In addition to the pay package, Tesla is also seeking shareholder approval to relocate the company's articles of incorporation from Delaware to Texas. Glass Lewis has advised voting against this move, along with opposing the reelection of board member Kimbal Musk, Elon Musk's brother.

Overall, the recommendation from Glass Lewis to reject Elon Musk's $56 billion pay package adds further dimension to the ongoing discussion surrounding the CEO's remuneration. With the annual meeting approaching, all eyes are now on the shareholders and their decision, which could have far-reaching implications for both Tesla and Musk's future endeavors.