Tesla shareholders approve Elon Musk’s $56B pay deal and return to Texas

Tesla shareholders Voted to reapprove the pay package for CEO Elon Musk, initially valued at $56 billion, and to reincorporate the electric vehicle company in Texas.

These moves would provide a substantial win for Musk as he attempts to reassert his control. TeslaThe final payout will depend on Tesla’s share price.

The approval reflects the strong support the 52-year-old billionaire has received from Tesla’s retail investors, who often vocally support the billionaire. Despite resistance from some major institutional investors and proxy advisory firms, the proposal was successful.

At Tesla’s annual meeting in Austin, Texas, an excited Musk expressed his appreciation to attendees: “Wow, I love you guys.”

so hot I love you guys! ♥️

一 Elon Musk pic.twitter.com/mIt1fZ9Qi3

— DogeDesigner (@cb_doge) June 13, 2024

During the event, the CEO of X described his unwavering optimism, which he considers essential to his achievements: “If I wasn’t optimistic this wouldn’t exist, this factory wouldn’t exist,” he said, drawing applause. “But in the end I deliver results. That’s the important thing.”

The pay deal is exceptionally lucrative, worth more than 3,000 times the annual income of last year’s highest-paid US executive.

Will the courts still deny Elon Musk his Tesla pay package?

Regardless of the outcome of the vote, its legal bindings remain uncertain. Legal experts have indicated it is unclear whether the court that initially blocked the deal will again accept the vote and reinstate the pay package. “The vote doesn’t change anything,” said Matthew Shapiro, managing partner at Obermeyer Rebman Maxwell & Hippel. BBCHe said this would only allow Tesla to obtain more favorable court decisions.

while talking to Reuters”This is far from over,” said Brian Quinn, a law professor at Boston College. Delaware Judge Kathleen McCormick He said the vote would be thoroughly scrutinized to ensure it was not influenced by pressure or improper pressure from Musk. He said Tesla’s board was criticized by the judge for being overly dependent on Musk and influenced by close personal and financial ties.

As a “parting gift” to Delaware after the decision, Musk posted a photo of a cake with an X on it that read “Vox Populi, Vox Dei,” which means “The voice of the people is the voice of God.”

I’m sending this cake to Delaware as a farewell gift 😘 pic.twitter.com/uLKE7LDSCW

— Elon Musk (@elonmusk) June 14, 2024

Tesla C-Suite Criticized by Delaware Judge

Tesla Chairman Robin Denholm’s credibility was at stake following Judge McCormick’s criticism. It has been told described his oversight as “indifferent” and likened the board’s behavior to that of “slavish servants of an egotistical master”

Musk and Denholm described the shareholder votes as decisive for Musk’s stay at the company. Evan Frishberg, chief sustainability officer at Amalgamated Bank, also told Reuters, “Elon Musk and Chair (Robin) Denholm have made this about CEO loyalty and presented the votes as a decision about whether the company can keep Musk or not.”

“That’s a lot of pressure, but it doesn’t change the fact that good governance is good for a company’s bottom line, and the Tesla board has consistently and clearly been weak on that front.”

In recent months, Denholm has been actively involved in shareholder communications, reiterating the theme “a deal is a deal.” She argued that Musk had met the “extremely ambitious” share price and financial milestones laid out in his original 2018 compensation package.

A deal is a deal.
@Elon Musk Turned Tesla from a loss-making company into a company that is changing the world.

And they created tremendous value — more than $735 billion — $TSLA During this period, shareholders were also kept together.

Allen kept his promise; now it’s time for us to keep ours.… https://t.co/Bk3QEi7b4g

— Tesla (@Tesla) June 10, 2024

In private discussions with asset managers, financial Times Denholm warned that Tesla could lose Musk if he doesn’t get his shares, the report said. He said the stock options were a must to keep him busy because “his passion and hobby is interplanetary space travel,” according to an insider.

Additionally, shareholders increased their influence by passing measures such as reducing the board’s term to one year and lowering the voting threshold to pass resolutions to a simple majority, despite the board’s objections to these changes.

Featured Image: Elon Musk on X