Has Tesla CEO Elon Musk already won the controversial shareholder vote to approve his $56 billion pay package?
According to his celebratory posts on his social media network, X, things certainly seem headed in that direction as of Wednesday evening. Though Tesla will announce the final results of the vote at this afternoon's annual shareholder meeting in Austin, the CEO is already claiming victory.
Update 5:10 p.m. June 13: At Tesla's annual investor meeting in Austin tonight, company officials announced that Musk's pay package was indeed approved by shareholders. The original story follows below.
Musk's value and controversy
Tesla CEO Elon Musk's $56 billion pay package, approved in 2018 but rejected by a Delaware judge this year, has been a source of intense controversy. Critics say Musk is distracted by his other ventures and hasn't delivered much for Tesla as of late, while his ardent supporters say he's key to the company's future—which he says will be driven less by cars and more by robotics and AI.
"Both Tesla shareholder resolutions are currently passing by wide margins," Musk posted late Wednesday evening. "Thanks for your support!"
If these results bear out today, they will reaffirm a controversial and unprecedented pay package he was granted in 2018 but that was rejected by a Delaware Chancery Court judge amid a shareholder lawsuit earlier this year. The other resolution would be to incorporate Tesla at its physical headquarters in Texas, not in Delaware, and Musk indicates that measure too is headed for approval.
The outcome, if true, may not be terribly surprising. While a number of large, institutional investment firms like the California Public Employees' Retirement System and Glass Lewis opposed Musk's pay package, saying the CEO has been distracted by his many other ventures as of late to the detriment of Tesla, Musk still enjoys immense support among a dedicated fanbase of retail investors.
And even if many of them didn't approve of his leading multiple companies at once—to say nothing of his public antics as of late, or even a Wall Street Journal investigation that came out yesterday and accused him of having sexual relationships with female SpaceX employees—those investors said they didn't want to risk the value of their Tesla shares plummeting if Musk were to leave Tesla. That was an outcome he and Tesla board chair Robyn Denholm strongly hinted at amid a massive public and social media push to get out the vote in Musk's favor.
In other words, if this vote does officially pass today, it's going to be seen as a stamp of approval for Musk's continued leadership of Tesla and his claimed plan to make it "the most valuable company on earth" thanks to investments in AI and the pursuit of fully self-driving cars.
However, as CNBC, Bloomberg and others note today, the vote alone does not clear the way for Musk's pay package to be reinstated. That's still working its way through Delaware's courts, which continue to take issue with the fact that Tesla's board of directors isn't a very independent one—although the vote could help tip the legal case in his favor. The company even said in a proxy filing that it "cannot predict with certainty how a vote to ratify Musk’s compensation would be treated under Delaware law."
So while Musk's pay package—which he has even said is tied to whether or not he'll stay at Tesla or pursue AI projects "outside" of the automaker—may not be settled for some time, today's vote will further cement the idea that "Tesla is Musk, and Musk is Tesla." For better or worse.
This is a breaking news story; more to come on InsideEVs as the day goes on.
Contact the author: patrick.george@insideevs.com
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2024-06-13 21:12:00Z
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