May 25 (Reuters) - Proxy advisory firm Glass Lewis said

on Saturday it has urged Tesla shareholders to reject a

$56 billion pay package for Chief Executive Officer Elon Musk,

which if passed would be the largest pay package for a CEO in

corporate America.

The report cited reasons like the "excessive size" of the

pay deal, the dilutive effect upon exercise and the

concentration of ownership. It also mentioned Musk's "slate of

extraordinarily time-consuming projects" which have expanded

with his high-profile purchase of Twitter, now known as X.

The pay package was proposed by Tesla's board of directors,

which has repeatedly come under fire for its close ties with the

billionaire. The package has no salary or cash bonus and sets

rewards based on Tesla's market value rising to as much as $650

billion over the 10 years from 2018. The company is currently

valued at about $571.6 billion, according to LSEG data.

In January, Judge Kathaleen McCormick of Delaware's Court of

Chancery voided the original pay package. Musk then sought to

move Tesla's state of incorporation to Texas from Delaware.

Glass Lewis also criticized the proposed move to Texas as

offering "uncertain benefits and additional risk" to

shareholders.

Tesla has urged shareholders to reaffirm their approval of

the compensation.

In an interview this month, Tesla's board chair Robyn

Denholm told the Financial Times that Musk deserves the pay

package because the company hit ambitious targets for revenue

and its stock price.

Musk became Tesla CEO in 2008. In recent years, he has

helped improve results, taking the company to a $15 billion

profit from a $2.2 billion loss in 2018 and seven times more

vehicles have been produced, according to an online campaign

website, Vote Tesla.

The proxy advisor also recommended shareholders vote against

the reelection of board member Kimbal Musk, the billionaire' s

brother while former 21st Century Fox CEO James Murdoch

re-election was recommended.