A group including the New York City pension funds filed a notice on Monday urging others to vote against Tesla CEO Elon Musk’s $46 billion stock-option package at the company’s shareholder meeting on June 13. New York City Comptroller Brad Lander, who serves as investment advisor to the city’s funds with $260 billion in assets, is marshaling the charge.

According to the letter he signed, the Tesla board is “overly beholden” to Musk and hasn’t bothered to step in when Musk ignores Tesla to focus on his roles at the Boring Company, Neuralink, SpaceX, X, and other companies. The investors complained about Musk splitting his time between the companies by focusing on one company per day. “The board has yet to ensure that Tesla has a full-time CEO,” investors said. 

Meanwhile, he’s siphoning key talent away from Tesla. “More recently, Musk has begun poaching top engineers from Tesla’s AI and autonomy team for his new company, xAI, including Ethan Knight, who was computer vision chief at Tesla,” the investor letter said.

The notice has the makings of a showdown next month between some of Tesla’s pension fund investors, who believe they’re overpaying for a part-time CEO, and the EV maker’s base of individual retail investors who see Musk as a visionary leader who must remain at Tesla at all costs. At stake is a shareholder vote to ratify Musk’s pay plan, now valued at about $46 billion, after it was rescinded by a judge in January. Tesla proposed the pay plan a second time in the spring, and has thrown its support behind the proposal. 

Musk has rallied the retail base of support with tweets thanking them for voting and Tesla’s own ads promoting a vote in favor of Musk’s pay plan. Since April 29, Tesla has notified investors 11 separate times that Musk has tweeted about the meeting or that it has updated its website devoted to the vote, titled “Protecting Your Investment and Tesla’s Future.”

According to the dissident investors, which include Amalgamated Bank, AkademikerPension, and SOC Investment Group, Musk represents a key risk to stock values because he has pledged a portion of his 20% stake in Tesla as collateral for loans. “If Musk were ever forced to sell his pledged stock, it could lead to a massive drop in stock price to the detriment of shareholders,” the investor letter said.   

Plus, the hands-off nature of the board means Musk treats Tesla “as a coffer” for himself and his other businesses, the investors argue. Musk has admitted to using Tesla engineers to work on issues at X, formerly Twitter, and defended himself by saying that “no Tesla board member had stopped him from using Tesla staff for his other businesses,” according to the letter. Those “distractions” have played a material role in Tesla’s underperformance relative to the S&P 500, General Motors, and Ford, investors said.  

The Tesla board begs to differ, however. The website Tesla set up to support its pay-ratification vote features voting instructions and other information about the shareholder meeting, including a video with independent board chair Robyn Denholm. In it, Denholm said Musk’s comp plan was set up a decade ago with targets so “far-fetched, so extraordinarily ambitious that skeptics called them laughingly impossible.”

“If he failed, Elon was entitled to receive no salary, no cash bonuses, and no equity,” said Denholm. “But if Elon was able to make it happen, you and all other stockholders would reap the benefits. The award worked.” In half the time, Musk grew revenues from $11.8 billion to $96.8 billion, and turned profitability from $2.2 billion in the red to a $15 billion profit, Denholm said.

Indeed, one of the key reasons the vote to ratify Musk’s moonshot pay plan succeeded in 2018 was because the stakes were markedly different from other CEOs. The Tesla board was prepared to pay Musk $0 if he didn’t hit the targets, rather than applying what is known as so-called “board discretion,” where corporate directors still pay CEOs who have failed to hit financial markers.

Oftentimes, boards tell investors they don’t want to hold CEOs or executives responsible for economic headwinds or other factors out of their control that contributed to them missing stated financial targets or goals. Although, boards must balance the need for discretion with the need to keep executives and CEOs in their roles. Only in an extreme case would a CEO take home no pay for a long-term award—in addition to no salary, cash bonus or time-based stock—because the risk of losing the executive and destabilizing the company would be too high. 

What makes Musk’s pay plan complicated is that investors likely see troubles ahead for Tesla, while the board appears to be focused on paying Musk for the targets he achieved in the past. Further, the magnitude of his pay and the fact that Tesla’s performance has struggled this year has added to the complexity. The company announced it would lay off 10% of its staff and even slashed its summer internship program, all while the company is devoting resources to reinstating Musk’s moonshot. Musk himself famously ignores the norms most publicly traded company CEOs abide by and appears to act—and tweet—impulsively and without conferring with the independent directors on the board, which does little to reassure investors. 

In addition to ratifying his pay plan, Tesla is seeking investor approval to move from being incorporated in Delaware to Texas, a change that seems motivated by the Delaware judge’s ruling on Musk’s pay. According to the voting website: “The Delaware Court has shown that it will ignore the will of our stockholders. We believe in stockholder rights. We believe Texas Courts will respect those rights.”

In addition to rallying other investors to vote down Musk’s pay, the dissident group is asking shareholders to withhold support from Musk’s brother, Kimbal Musk, and former 21st Century Fox CEO James Murdoch. Kimbal has served on the board for 20 years, and Murdoch is Musk’s friend. Neither is truly independent, the investors said.