Tesla Shareholders Approve Elon Musk’s Multi-Billion-Dollar Pay Package
At the annual shareholder meeting in Austin, Texas, Tesla shareholders have approved Elon Musk’s multi-billion-dollar pay package. The package, which was once valued at $56bn (£44bn), has now declined in value to $44bn (£34bn) in tandem with Tesla’s stock.
Despite opposition from some large institutional investors and proxy firms, the proposal was passed. At the meeting, Musk described himself as “pathologically optimistic” and received resounding applause from shareholders. “If I wasn’t optimistic, this factory wouldn’t exist,” Musk said. “But I do deliver in the end. That’s the important thing.”
However, the approval does not resolve a lawsuit on the pay package that is currently ongoing in a Delaware court. Some legal experts believe that this lawsuit could last for months. In January, the judge invalidated the pay package, describing it as “unfathomable”. Musk may also face additional lawsuits on the deal, which would make it the largest in American corporate history.
The approval of the pay package by shareholders is not the end of the matter, according to Boston College Law School professor Brian Quinn. He stated, “This thing is not over.” The Delaware judge will closely examine the vote and require Tesla to prove that the process was not coerced or improperly influenced by Musk.
The judge had previously criticized Tesla’s board for being “beholden” to Musk, stating that the plan was proposed by a “conflicted board” with “close personal and financial ties” to its top executive.
In addition to approving the pay package, shareholders also approved a proposal to move the company’s legal home from Delaware to Texas. Other proposals, including the re-election of two board members – Musk’s brother Kimbal Musk and James Murdoch, son of media mogul Rupert Murdoch – were also approved.
Despite opposition from the board, shareholders increased the level of investor control by passing proposals to shorten board terms to one year and lower voting requirements for proposals to a simple majority. The voting tallies are expected to be revealed in the coming days.
The annual shareholder meeting was watched by at least half a million viewers on the livestream on X, which is also owned by Musk, and about 40,000 viewers on YouTube.
As electric vehicle sales have slowed, Tesla’s share price has dropped by approximately 55% from its 2021 peak. However, the stock closed up 2.9% on Thursday. For more business news, visit our website.
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