Elon Musk’s $56bn pay package approved by Tesla shareholders

Business

Tesla shareholders have approved Elon Musk’s $56bn (£44bn) pay package.

The proposal passed despite opposition from some large institutional investors and proxy firms.

Onstage at the annual shareholder meeting in Austin, Texas, the billionaire described himself as “pathologically optimistic”.

“If I wasn’t optimistic this wouldn’t exist, this factory wouldn’t exist,” Musk said to resounding applause.

“But I do deliver in the end. That’s the important thing.”

The approval does not, however, resolve a lawsuit on the pay package in a Delaware court, which some legal experts believe could last months.

The judge invalidated it in January, describing it as “unfathomable”.

More on Delaware

Musk may also face fresh lawsuits on the deal, which would be the largest in American corporate history.

Shareholders had first approved the bumper pay packet in 2018.

“This thing is not over,” said Brian Quinn, a professor at Boston College Law School.

The Delaware judge will scrutinise the vote and require Tesla to prove the process was not coerced or improperly influenced by Musk, Professor Quinn said.

A general view of the Tesla gigafactory in Austin, Texas, U.S., February 28, 2023. REUTERS/Go Nakamura
Image:
A general view of the Tesla gigafactory in Austin, Texas, U.S., February 28, 2023 Pic: Reuters

The judge had criticised Tesla’s board fore being “beholden” to Musk, saying the plan was proposed by a “conflicted board” with “close personal and financial ties” to its top executive.

Shareholders also approved a proposal to move the company’s legal home to Texas from Delaware.

Read more from business:
House prices ‘rebound’

Britons put record amounts into ISAs
Boeing blocked from increasing production

They also backed other proposals, including the re-election of two board members, Musk’s brother Kimbal Musk and James Murdoch, son of media mogul Rupert Murdoch.

Shareholders did increase the level of investor control by passing proposals in favour of shortening board terms to one year and lowering voting requirements for proposals to a simple majority, despite board opposition to both.

Tesla did not disclose the voting tallies, which are expected to be revealed in coming days.

At least a half-million viewers watched the meeting on the livestream on X, which Musk also owns, and about 40,000 watched on YouTube.

Tesla’s share price has dropped about 55% from its 2021 peak as electric vehicle sales have slowed.

The stock closed up 2.9% on Thursday.

Articles You May Like

Ethereum co-founder warns against voting only on ‘pro-crypto,’ a day after a16z founders support Trump
Strictly star Zara McDermott breaks silence after former dance partner’s exit from show
Amazon’s Prime Day a ‘major’ cause of worker injuries, Senate probe finds
CrowdStrike issue causes major outage affecting businesses around the world
Nail bars and car washes to be targeted in summer immigration raids