Tesla Shareholders Say Yes To CEO Elon Musk's $56 Billion Pay Package (Image: X @ elonmusk)
On Thursday, Tesla, the electric vehicle maker said that the shareholders approved CEO Elon Musk‘s $56 billion pay package giving a big shout-out to his leadership and an incentive to keep pondering on his biggest source of wealth.
The approval highlights the support that Musk basks from Tesla’s retail investor base, many of whom are vocal fans of the shrewd billionaire. The proposal passed regardless of the opposition from some large institutional investors and proxy firms. At the annual shareholder meeting in Austin, Texas, Musk described himself as pathologically optimistic. “If I wasn’t optimistic this wouldn’t exist, this factory wouldn’t exist” and I do deliver in the end, That’s the important thing.”
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According to the reports, the approval does not, however, resolve a lawsuit on the pay package in a Delaware court, which some legal experts think could stretch out for months. The judge nullified the pay package in January, describing it as “unfathomable.”
Musk may also face fresh lawsuits on the package, which would be the largest in U.S. corporate history as the Shareholders voted for this package in 2018. The judge had criticized Tesla’s board as “beholden” to him, 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 on Thursday. They also approved other proposals including the re-election of two board members: Musk’s brother Kimbal Musk and James Murdoch, son of media tycoon Rupert Murdoch.
Despite board opposition to both, they increased 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 mere majority.
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However, Tesla did not disclose the voting tallies, which are anticipated to be disclosed in the coming days. About 40,000 watched on YouTube and a half-million viewers watched the meeting on the livestream on social media platform X.
As per the reports, Shareholder commendation for the compensation serves as both an endorsement of Musk’s tenure and an acknowledgement that investors do not want to risk the company’s future. “They are brushing aside essentially key man risks, where Tesla has become even more dependent on Musk going forward,” said Jason Schloetzer, a business professor at Georgetown University with expertise in corporate governance.
Since the pay package was approved in 2018, Musk has added two more companies to his roster. He is now the owner of six firms, including rocket builder SpaceX, social media giant X, and the artificial intelligence company xAI.
