Tesla shareholders approved a new compensation package for CEO Elon Musk during a vote on Thursday, securing over 75% support among those who participated. This vote is part of an effort to retain Musk’s leadership amid significant challenges for the company. The newly approved package is noted to provide Musk with the largest corporate payout in history, though final results are anticipated to be detailed in an upcoming Securities and Exchange Commission filing.
The package proposed by the board last September promises Musk more than 423 million additional shares, elevating his ownership stake in Tesla from approximately 15% to about 25%. To qualify for the full compensation, Musk must meet several ambitious targets, including increasing Tesla’s market capitalization from $1.5 trillion to $8.5 trillion within the next decade. Other milestones involve deploying 1 million robotaxis, selling an additional 12 million vehicles, achieving 10 million Full Self-Driving subscriptions, and producing 1 million humanoid robots.
Notably, some of Tesla’s major shareholders opposed the proposal, including Norges Bank Investment Management and several public pension funds. Additionally, proxy advisory firms Institutional Shareholder Services and Glass Lewis expressed their disagreement with the pay package.
Musk’s previous compensation, valued at over $50 billion, was invalidated by a Delaware court due to concerns regarding the independence of Tesla’s board from Musk. Despite previous shareholder approvals, the judge’s ruling has led to an appeal to the Delaware Supreme Court. The ongoing legal situation prompted Musk to propose moving Tesla’s legal jurisdiction from Delaware to Texas, which shareholders also accepted.
The decision comes as Tesla’s board emphasizes the company’s potential in AI and robotics. However, challenges persist as sales have declined and competition has intensified. Recent launches, like the robotaxi service in Austin, fall short of Musk’s previous forecasts. Moreover, the introduction of the Cybertruck has not met expectations, indicating potential hurdles for Musk to achieve the outlined goals in his new compensation package.
Source: https://www.theverge.com/news/815892/tesla-shareholder-vote-elon-musk-pay-trillion-robot