Tesla shareholders endorsed a record $56 billion payout to CEO Elon Musk, according to NBC News.
Tesla CEO Elon Musk on Thursday won shareholder support in his fight to get back a $56 billion pay package. Shareholders were faced with the question of whether to bless a pay package they originally approved in 2018, but which a Delaware judge deemed illegal under that state’s corporate law.
Shareholders, in the end, voted to reinstate the package, Brandon Ehrhart, Tesla’s general counsel and secretary of the board, said on stage at the company’s annual shareholder meeting. Apart from this, they also voted to relocate Tesla’s corporate headquarters to Texas from Delaware, leaving the state where most large companies incorporate, after Musk criticised Delaware’s court system.
The Tesla CEO used his X account to drum up support among retail investors and criticise those who opposed him, such as the Norwegian sovereign wealth fund. Musk has 187 million followers on the X social network.
Musk’s victory fell on the shoulders of individual Tesla investors who backed him by a wide margin, according to Musk. However, the shareholder vote solidified his position at the helm of Tesla. Musk nearly threatened to leave Tesla if shareholders didn’t give him more shares.
The struggle is still ongoing
The fight for $56 billion is not over yet, as the Delaware judge who overturned Musk’s compensation in January will likely have to rule on whether the latest shareholder vote was fair under state law.
The compensation plan, which consists of stock options tied to Tesla’s achievement of various performance metrics, would be the largest in corporate history if Musk manages to get the full amount, according to a ruling by Delaware Chancery Court Judge Kathleen McCormick. She found that this salary was 250 times the average salary of Musk’s peers.
Musk, in turn, claimed he had been working without pay for years because he had not yet exercised any of his stock options and that he would have to hold the stock for five years before he could sell it. However, he also owned 13% of Tesla as of January, so he has benefited from the rise in the stock price in recent years.
Musk has become a far more polarising public figure than he was a few years ago, including through his extreme views on immigration and transgender rights. He has also grown closer to former President Donald Trump. As of 14 June 2024, Musk’s total net worth is about $207 billion, making him the first richest person in the world, according to the week’s Bloomberg Billionaires Index.
