A group of Tesla shareholders are asking investors to vote against a compensation package worth more than 40 billion dollars (£31.48 billion) for CEO Elon Musk, saying that it is not in the electric vehicle maker’s best interest.

Tesla is struggling with falling global sales, slowing electric vehicle demand, an ageing model line-up and a stock price that has tumbled 30% this year.

The shareholder group, which includes New York City comptroller Brad Lander, SOC Investment Group and Amalgamated Bank, said in a letter to shareholders that ratification of Mr Musk’s pay package would do nothing to promote Tesla’s long-term growth and stability.

There is also concern that approval of the pay package will potentially lead to lawsuits arguing that it is corporate waste. And Mr Musk is viewed as a part-time CEO at Tesla, with his time increasingly being spent on other business commitments, the letter said.

“Shareholders should not pretend that this award has any kind of incentivising effect – it does not. What it does have is an excessiveness problem, which has been glaringly apparent from the start,” the group said.

They noted that if shareholders ratify the compensation package, it is possible that another plan will be put forth next year.

“Given Tesla’s history of exponentially larger awards, Mr Musk may well ask for another award,” the group said.

The group is also asking investors to vote against the re-election of board members Kimbal Musk, Elon’s brother, and James Murdoch, a former executive at media company 21st Century Fox.

Last month Tesla asked shareholders to restore Mr Musk’s pay package, which was valued at 56 billion dollars (£44.07 billion) at the time, that was rejected by a Delaware judge this year. At the time, it also asked to shift the company’s corporate home to Texas.

The changes will be voted on by stockholders at a June 13 annual meeting.

Tesla posted record deliveries of more than 1.8 million electric vehicles worldwide in 2023, but the value of its shares has eroded quickly this year as EV sales soften.

The company said it delivered 386,810 vehicles from January to March, nearly 9% fewer than it sold in the same period last year. Future growth is in doubt and it may be a challenge to get shareholders to back a fat pay package in an environment where competition has increased worldwide.

Starting last year, Tesla has cut prices as much as 20,000 dollars (£15,700) on some models. The price cuts caused used electric vehicle values to drop and clipped Tesla’s profit margins.

In April, Tesla said that it was letting about 10% of its workers go, around 14,000 people.