Tesla Shareholders Approve Elon Musk’s $56 Billion Pay Package
Tesla shareholders have overwhelmingly approved a controversial $56 billion pay package for CEO Elon Musk and voted to move the company’s legal headquarters to Texas, Excel Magazine International has gathered.
The decision comes despite a Delaware judge blocking the deal earlier this year, citing concerns of fairness to shareholders.
The approved compensation plan, which is unprecedented in scale, hinges on Tesla’s share price performance and has been a point of contention.
Initially blocked by Delaware judge Kathaleen McCormick, the package was deemed “unfair” and the process for determining it “deeply flawed” due to the board’s close ties to Musk.
Concerns were raised about the board’s independence, with key figures having personal relationships with Musk, including a board director vacationing with his family and a former general counsel who was Musk’s divorce attorney.
Elon Musk, addressing an enthusiastic crowd of shareholders in Texas, expressed his gratitude with characteristic flair, “Hot damn, I love you guys.”
The vote garnered 72% approval, mirroring the 73% support the package received in 2018. The pay deal, which grants Musk the right to approximately 300 million shares, is intended as a reward for achieving ambitious goals related to sales, profits, and share price set out in 2018.
Despite the shareholder vote, legal experts, including Mathieu Shapiro of Obermayer Rebmann Maxwell & Hippel, argue that the outcome “changes nothing” immediately and it remains uncertain if the court will accept the re-vote.
The legal battle over Musk’s compensation has highlighted broader concerns about his leadership style and the board’s oversight.
Tesla’s share price rose nearly 3% following Musk’s announcement of the vote results on his social media platform, X.
Industry analysts like Karl Brauer see the vote as a strong endorsement of Musk’s leadership, which has driven a significant appreciation in Tesla’s stock value.
Former Tesla executive Georg Ell noted the substantial returns for investors since 2018, arguing that the pay package is justified given the company’s performance.
Tesla’s board maintains that the package is essential to retain Musk’s commitment to the company.
Shareholders also re-elected James Murdoch and Kimbal Musk to the board, reinforcing the existing leadership structure.
