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Tesla’s Musk wins shareholder approval for $56 billion pay package, praises his ability to ‘deliver’

AUSTIN: Tesla shareholders approved CEO Elon Musk’s $56 billion pay package, the electric vehicle maker said Thursday, a big thumbs up for his leadership and an incentive to stay focused on its biggest source of wealth. The approval underlines the support Musk enjoys from Tesla’s retail investor base, many of whom are outspoken fans of the erratic billionaire. The proposal passed despite opposition from some large institutional investors and proxy firms.

On stage 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,” Musk said to applause. “But in the end I deliver. That is the most important.”

He announced late on Wednesday that the proposals could count on strong support. However, the approval does not resolve a lawsuit over the pay package in a Delaware court, which some legal experts believe could last months. The judge invalidated the pay package in January, calling it “unfathomable.” Musk could also face new lawsuits over the package, which would be the largest in corporate history. Shareholders had voted for this package in 2018.

“This case is not over yet,” said Brian Quinn, a professor at Boston College Law School. The Delaware judge will scrutinize the vote and require Tesla to prove that the process was not coerced by Musk or improperly influenced, he said. 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 the chief executive. On Thursday, shareholders also approved a proposal to move the company’s legal home from Delaware to Texas. They also approved other proposals, including the re-election of two board members: Musk’s brother Kimbal Musk and James Murdoch, son of media mogul Rupert Murdoch.

Shareholders have increased the level of investor control by adopting proposals in favor of reducing board terms to one year and reducing voting requirements for proposals to a simple majority, despite board opposition to both.


Tesla did not reveal voting figures on Thursday, which are expected to be revealed in the coming days. At least half a million viewers watched the meeting via livestream on social media platform X, and about 40,000 watched on YouTube.

“This is primarily a message that Tesla’s retail shareholders approve of what’s going on. It will be interesting to see what the exact percentages of votes are,” said Lindsey Stewart, director at Morningstar Sustainalytics.

Shareholder approval of the compensation serves as both an endorsement of Musk’s tenure and an acknowledgment that investors do not want to risk the company’s future.

“They are ignoring the most important human risks, while Tesla has become even more dependent on Musk going forward,” said Jason Schloetzer, a business professor at Georgetown University with expertise in corporate governance. In January, Musk threatened to build AI and robotics products outside of Tesla if he failed to gain sufficient voting control. He shifted the company’s focus to robotaxis, bringing cheaper electric cars to the mass market, amid concerns from some investors who fear the autonomous technology will be difficult to perfect.

In an update on Tesla’s performance, Musk said Thursday that the company recently shipped a record 1,300 Cybertrucks in a week and plans are underway for volume production of its Semi trucks. He spoke at length about plans for autonomous cars, although he gave no timetable for the launch of self-driving vehicles. Tesla’s stock price is down about 55% from its 2021 peak as electric vehicle sales have slowed and Musk’s attention wavers between Tesla and other companies he leads. The stock closed 2.9% higher on Thursday.

“Shareholders have once again endorsed the terms of the contract, sending a strong message that ‘a deal is a deal’ and that Musk should be rewarded for meeting the high thresholds of a fully incentive-based contract,” said Garrett Nelson, analyst at CFRA. Research.

“The news removes a large overhang on the shares, although we wouldn’t be surprised by a “sell the news” reaction on Friday after big gains over the past two trading sessions, as the likely outcome became clearer.”

The board had said Musk deserves the package because he has achieved all ambitious targets in terms of market value, turnover and profitability. Major investors, including the California Public Employees’ Retirement System, had called the pay package “excessive.”


“Elon Musk and Chairman (Robyn) Denholm have made this about CEO loyalty and presented the votes as a decision on whether the company can keep Musk,” said Ivan Frishberg, head of sustainability office at Amalgamated Bank.

“That’s a lot of pressure, but it doesn’t change the fact that good governance is good for the bottom line, and Tesla’s governance is consistently and clearly failing in that regard.”

While Musk is undoubtedly Tesla’s driving force and is credited with much of his success, the company’s sales and profits have slowed. There are concerns he is spreading himself too thin.

Musk has added two more companies to his roster since the pay package was approved in 2018. He now runs or owns six companies, including rocket maker SpaceX, social media giant X – formerly Twitter – and the artificial intelligence company xAI, which Musk created in 2023.

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