Elon Musk’s compensation package at Tesla has been approved by shareholders, allowing him to potentially earn up to $56 billion. The package was previously blocked by a judge in Delaware, but Tesla shareholders voted in favor of it at the firm’s annual meeting in Texas.
The vote marks a significant win for Elon Musk, who expressed his gratitude to shareholders for their support. The deal is worth more than 300 times what the highest-earning CEO in the US made last year and more than 3,000 times the average CEO’s pay package.
However, legal experts have noted that the vote is not binding, and it remains uncertain whether the court that initially blocked the deal will accept the re-vote. The deal had faced criticism due to concerns about the board’s close ties to Mr. Musk and the fairness of the process for determining the package.
Following the court ruling in Delaware, Elon Musk announced plans to move Tesla’s legal headquarters to Texas. The move was in response to the voiding of his pay package by the Delaware court, which sided with a small investor who had sued over the deal.
Despite concerns about Mr. Musk’s leadership, Tesla shareholders overwhelmingly supported the compensation plan, with 72% of votes cast in favor. This level of support has been seen as a strong endorsement of the package by industry analysts.
The compensation plan grants Elon Musk rights to approximately 300 million shares, equivalent to a 10% stake in the firm, as a reward for meeting specific goals related to sales, profits, and share price. Tesla highlighted that Mr. Musk’s targets were challenging and instrumental in the company’s success.
Former Tesla executives and industry analysts have expressed mixed opinions on whether Elon Musk deserves such a substantial pay package. While some believe his leadership and vision were crucial to Tesla’s success, others have raised concerns about the fairness of the deal.
The re-election of board members James Murdoch and Kimbal Musk was also approved at the annual meeting, further solidifying Elon Musk’s position within the company. Shareholders who cast votes in favor of the package were promised a personal tour of Tesla’s factory in Texas by Mr. Musk himself.
Overall, the approval of Elon Musk’s compensation package represents a significant milestone for Tesla and its future growth. The ongoing support from shareholders underscores their confidence in Mr. Musk’s leadership and the company’s long-term prospects.