Tesla Shareholders Approve Elon Musk’s $50B Pay Package

Tesla shareholders have voted to approve CEO Elon Musk’s substantial $50 billion compensation package during the company’s annual shareholder meeting on Thursday. This comes despite ongoing legal challenges, as Tesla is appealing a Delaware judge’s decision to void the deal earlier this year. The approval from shareholders will likely play a crucial role in Tesla’s appeal against Delaware Court of Chancery Judge Kathaleen McCormick, who has labeled Musk’s pay package as “unfathomable.”

In addition to Musk’s pay package, shareholders also approved Tesla’s plan to relocate its headquarters from Delaware to Texas. This move aligns with Musk’s earlier push for redomestication after Judge McCormick invalidated his compensation deal in January. Following the decision, Musk had tweeted, “Never incorporate your company in the state of Delaware,” signaling his dissatisfaction with the state’s corporate regulations.

Musk’s compensation package, which is linked to performance milestones and Tesla’s stock price, remains a contentious issue. Despite the stock being down nearly 27% since the beginning of the year, the package could significantly increase Musk’s stake in the company. If the compensation plan is fully realized, Musk’s equity in Tesla could rise from 13% to 22%, bringing him closer to his goal of acquiring 25% equity to further his ambitions in artificial intelligence development at Tesla.

The meeting also saw the re-election of Musk’s brother, Kimbal Musk, and James Murdoch, son of media mogul Rupert Murdoch, to Tesla’s board of directors. This decision underscores the close-knit nature of Tesla’s leadership, which has been a point of contention in the legal scrutiny of Musk’s compensation.

On the stock market, Tesla’s shares experienced a surge, reaching as high as $190 per share on Thursday before settling at $182.47 at the close of trading. This uptick reflects investor confidence in Tesla’s future prospects despite the ongoing legal battles.

Elon Musk’s net worth saw a 1.4% increase on Thursday, reaching an estimated $212.8 billion. This growth is indicative of Musk’s financial acumen and his ability to navigate through corporate and legal challenges.

During the shareholder conference, Musk revealed that he had faced two assassination attempts in the last seven months. He stated, “We actually did have two homicidal maniacs in the last roughly seven months come to aspirationally try to kill me and a bunch of other people.” This alarming revelation has led Musk to cease signing autographs out of concern for his safety, adding, “I have to be more standoffish and stuff, which I prefer not to be but it seems wise.”

The approval from shareholders does not resolve the ongoing legal dispute over Musk’s pay package. Judge McCormick has scrutinized the relationship between Musk and Tesla’s board, arguing that the company has not adequately protected shareholder interests. Tesla awaits a final ruling on Musk’s compensation, which has been delayed due to concerns over legal fees. If Tesla’s appeal fails, the company might propose a lesser-valued compensation package for Musk to shareholders.

Columbia University law professor Zohar Goshen commented that a failed appeal could lead to the introduction of a revised and possibly reduced compensation package for Musk. Such a move could appease legal concerns while still providing substantial incentives for Musk to achieve his ambitious goals for Tesla.

In summary, while Tesla shareholders have overwhelmingly supported Musk’s pay package and the move to Texas, the company continues to face significant legal hurdles. The outcome of Tesla’s appeal and the final resolution of Musk’s compensation will be critical in shaping the future of the electric vehicle giant and its charismatic leader.