‘Thanks for your support’: Elon Musk announces $A84b Tesla shareholder pay deal is over the line
Tesla shareholders are set to approve Elon Musk’s $US56 billion ($A84 billion) pay package in what is being seen as a thumbs-up to his leadership - and an enticement for keeping his focus on the electric-vehicle maker.
Musk posted a chart on his social media platform X late on Wednesday that showed the resolution - and another vote to move the company’s legal home to Texas - was set to pass by wide margins, though shareholders are allowed to change their votes up to the start of the annual meeting.
A person familiar with the preliminary voting tally confirmed that Musk posted an accurate count of the figures. The result will be announced at the meeting at Tesla’s headquarters in Texas late on Thursday.
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By continuing you agree to our Terms and Privacy Policy.“Thanks for your support!” Musk said.
The Tesla CEO could still face a long legal fight to convince a Delaware judge who invalidated the package in January, describing it as “unfathomable”. He may also face fresh lawsuits over Thursday’s vote on the package, which dates from 2018 and would be the largest in US corporate history.
Shareholder approval would serve as both an endorsement of Musk’s tenure and an acknowledgement that investors do not want to risk the company’s future.
In January, Musk threatened to build AI and robotics products outside of Tesla if he fails to gain enough voting control, which essentially requires the 2018 pay package to be approved.
He has shifted the company’s focus to robotaxis, shelving cheaper mass-market electric cars, to the concern of some investors who fear the autonomous technology will be hard to perfect.
Tesla’s share price has dropped about 60 per cent from its 2021 peak as EV sales have slowed and Musk’s attention has wavered between Tesla and other companies he runs. Tesla shares were up 3.8 per cent on Thursday afternoon.
“This vindicates Musk and allays some investor concerns around his waning interest in Tesla,” said Sandeep Rao, senior researcher at Leverage Shares, which owns Tesla’s stock.
Board chair Robyn Denholm said in a regulatory filing earlier this month that reinstating the pay package was necessary for “retaining Elon’s attention and motivating him.”
The board said Musk deserves the package because he hit all the ambitious targets on market value, revenue and profitability.
Major proxy firms Glass Lewis and Institutional Shareholder Services had urged shareholders to reject the pay package, and large investors including Norway’s sovereign wealth fund and major US pension funds had said they would vote against it.
The pay package is excessive and may enable Musk to strengthen his shares “at the expense of diluting the value of those belonging to other shareholders,” Marcie Frost, CEO of the California Public Employees’ Retirement System said.
