In a decisive move, Tesla shareholders have again approved Elon Musk’s multi-billion-dollar pay package. This comes several months after a Delaware court had previously invalidated the agreement. According to Bloomberg, during Tesla’s annual shareholder meeting, stockholders signed off on a proposal to reinstate Muskโs pay package, valued at approximately USD$48 billion.
Judge Kathaleen McCormick of Delawareโs Chancery Court had earlier referred to Muskโs pay package, initially worth US$56 billion when first approved in 2018, as an “unfathomable sum.” In response to this ruling, Musk threatened to relocate Teslaโs state of incorporation to Texas. During the recent meeting, shareholders officially approved this move as well.
Implications of the shareholder vote
While Muskโs compensation approval is a significant step, it does not guarantee his substantial pay will be reinstated. The vote does not negate the judge’s initial ruling. However, Tesla is expected to appeal and use the latest shareholder vote as evidence that the companyโs stockholders support the compensation plan.
Musk was visibly pleased with the outcome of the vote. โI just want to start by saying, hot damn. I love you guys,โ he expressed after taking the stage at the shareholder meeting. He reassured shareholders that the reinstatement of his pay would not impact his dedication to Tesla in the short term. โIt is worth emphasising that itโs Tesla stock that I have to own for five years. It’s not cash, and I can’t cut and run, nor would I want to,โ Musk stated.
Looking ahead
The recent approval by Tesla shareholders underscores their confidence in Muskโs leadership and vision for the company. Despite the legal hurdles, the strong support from stockholders may play a crucial role in the upcoming appeals process. Teslaโs journey forward continues to be closely watched by investors and industry experts.
