Tesla Shareholders to Vote on $56 Billion Pay Package for Elon Musk
The controversial $56 billion pay package for Tesla’s CEO Elon Musk is back in the spotlight as shareholders prepare to vote on its approval. This comes after a court blocked the initial package, ruling that it had been influenced by Musk’s personal and financial ties to the company.
The proposed pay package, which would be the largest in corporate America, is not based on salary or bonuses. Instead, it is tied to Tesla meeting revenue and market value targets over the next 10 years. Tesla has stated that investors were fully informed of the court’s ruling and the potential implications before the new vote was called.
Musk, who has been vocal about his support for the pay package, expressed his confidence in its approval in a recent tweet. However, the process may face challenges and could take months to be finalized. In addition to the pay package, shareholders are also being asked to approve moving Tesla’s headquarters from Delaware to Texas.
Musk’s move to Texas has already received support from the state’s governor, Greg Abbott, who welcomed Tesla to a state with no personal or corporate income tax. The results of the vote are expected to be announced on Thursday night.
While Musk is confident in the approval of the pay package, there has been opposition from major proxy firms and large investors, including Norway’s sovereign wealth fund. Their concerns likely stem from the significant decline in Tesla’s stock value since its peak in 2021 and Musk’s involvement in other ventures such as SpaceX and xAI.
The Tesla board has defended the pay package, stating that Musk has met all the ambitious targets set for market value, revenue, and profitability. They also believe that approving the package would incentivize Musk to remain dedicated to Tesla.
Some experts, such as Columbia Law School Professor Zohar Goshen, believe that the initial court ruling should be reversed. He stated, “It is hard to estimate how the court will rule because there is too much noise around this decision. But my personal view is that Tesla should succeed.”