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Tesla shareholders approve salary package for Elon Musk, the staggering figure that will be paid to the CEO of the company is revealed
2024-06-14 08:20:46 / BOTA
Tesla shareholders have approved a $45 billion pay deal for the company's CEO Elon Musk, following a hotly contested referendum on his leadership.
The result, announced on Thursday, comes as the billionaire tycoon fights to retain the largest compensation package ever awarded to an executive at a US-listed company.
"I just want to start off by saying, damn, I love you guys!" Musk said jubilantly as he took the stage after the vote.
The vote took place after a Delaware judge overturned Musk's payout - at the time worth around $56 billion (£43.9) - in January, on the grounds that Tesla's board could not be considered independent of Musk's influence and reached that figure dollar through an illegal process.
The result is a victory for Musk and Tesla's board, as they campaigned fervently for shareholders to approve the deal. It could serve as a counter to the judge's ruling that struck down the award — making it easier for Tesla's board to argue that shareholders were properly informed about the pay package and board members' ties to Musk before they jumped ship. their votes.
Tesla's board warned that Musk could leave the company if the package was not approved, while Musk asserted on Wednesday evening that he had broad investor support.
Prominent shareholders such as Norway's sovereign wealth fund and the California Teachers Retirement System announced they would vote against the payment in early voting, while proxy advisory firms Glass Lewis and Institutional Shareholder Services also opposed the award.
The vote doesn't automatically mean Musk will get the money, however, and further disputes are likely. There are still numerous legal arguments about whether the board can be considered independent and whether the package can be considered fair after the judge ruled otherwise.
It's also possible that new lawsuits could arise over the vote, potentially bringing the case back before a judge and raising the possibility of a protracted legal battle. Shareholders also approved a measure to move Tesla's legal home from Delaware to Texas, further complicating any challenge.
Tesla originally created Musk's pay package in 2017, stipulating that the CEO receive 12 different installments of stock options depending on whether the company hits certain revenue and market targets. Shareholders approved that package by a wide margin in 2018, but an investor filed a lawsuit claiming the board had been misled and the package unfair.
Judge Kathaleen McCormick, who oversees Delaware's chancellor court, ruled that Tesla's board followed a "grossly flawed" process to determine Musk's pay. McCormick found that the board was riddled with personal conflicts and stacked with close allies of Musk, such as his former divorce lawyer.
Tesla's board, which is likely to appeal McCormick's decision, sought to correct its decision by shareholder vote. Despite McCormick's criticism of the pay package, the board tabled the same deal that the judge rejected — albeit now worth less money because of Tesla's falling share price.
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