• Tesla announced in April Musk would be personally insuring its board because it said it couldn't find a reasonable quote from an insurance company.
  • Investor adviser PIRC on Tuesday separately recommended Tesla shareholders vote Musk out as CEO over his prospective $55.8 billion bonus pay package.
  • Musk only qualifies for the full $55.8 billion bonus if Tesla hits certain financial milestones over a decade.
  • Visit Business Insider's homepage for more stories .

While Tesla is paying CEO Elon Musk to insure its board, a shareholder adviser is telling investors they should kick him out.

In an SEC filing on Tuesday, the electric vehicle company said it entered into a 90-day "indemnification agreement" with Musk on June 24.

"The Indemnification Agreement provides that Mr. Musk will provide, from his personal funds, directors' and officers' indemnity coverage to Tesla during the Bridge Term in the event such coverage is not indemnifiable by Tesla, up to a total of $100 million. In return, Tesla will pay Mr. Musk a onetime fee of $972,361," the filing reads.

The company announced in an update to its annual report in April that Musk was personally insuring the board against lawsuits because it had been unable to find a reasonable quote from an insurance company.

Separately on Tuesday, London-based investment advisory firm PIRC published a shareholder report urging Tesla shareholders to boot Elon Musk out of his job as CEO, as first reported by The Guardian .

Specifically, PIRC honed in on Elon Musk's $55.8 billion bonus package, the first tranche of which was unlocked for Musk in late May, saying it exposed the company to the risk of lawsuits. Musk's compensation package is complex , and he only qualifies for the full $55.8 billion stock option package if Tesla hits certain financial milestones over the next decade.

PIRC pointed to two cases.

In June the Police and Fire Retirement System of Detroit, a pension fund, sued Tesla alleging that directors including Musk unfairly compensated themselves.

An individual investor also brought a legal case centering on Musk's compensation in 2018, saying it breached the company's fiduciary duty. In September 2019, a Delaware judge ruled the company will have to defend the pay package in court . The trial is due to take place in October of this year.

PIRC added that Musk's erratic Twitter behavior poses an "unnecessary reputational risk to the company," and criticized his response to the coronavirus pandemic.

"Mr. Musk has been a vocal opponent of the COVID-19 quarantine, and reportedly required workers to return to work during quarantine, without sufficient precautions/protections and despite protests from workers [...]," the firm wrote on its report. "This concern is furthered as it has also been reported that multiple Tesla employees have tested positive for COVID-19 since returning to work."

Since the onset of the pandemic Musk has consistently downplayed its severity . In April the billionaire tweeted lockdown measures were "fascist," and in May he ended up in a standoff with local authorities after Tesla told its California employees to return to work in contravention of lockdown orders.

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