- Musk thanked investors at Tesla’s annual meeting in Texas, telling them, “I love you guys!”
- In July, Tesla lawyers are expected to meet with the judge who initially struck down the pay package.
- The compensation is valued at roughly $48 billion at current share prices.
Tesla shareholders have voted to approve Elon Musk’s record-breaking pay package and given the electric car manufacturer the go-ahead to move its state of incorporation from Delaware to Texas.
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Judge Kathaleen McCormick in Delaware struck down Musk’s $56 billion compensation package earlier this year, claiming that Tesla’s board wasn’t sufficiently independent of Musk. Despite the judge’s concerns, shareholders in the company have re-approved the pay, providing Tesla’s lawyers with leverage in appealing the court’s decision. At current Tesla share prices, Musk will receive approximately $48 billion.
Read: Elon Musk Confirms No Tesla Model Y Refresh Is Coming This Year
In the weeks leading up to the vote, Tesla’s board said approving the pay package was necessary to keep Musk motivated and prevent him from getting sidetracked by the myriad of other companies he owns.
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The original compensation package was challenged in 2018 by Tesla shareholder Richard Tornetta. Lawyers for Tesla are expected to meet with Tornetta and Judge McCormick in early July. The Wall Street Journal says the recent vote may prompt the judge to reconsider her decision, given that the concerns from her verdict were presented to shareholders.
The pay package was originally approved in 2018, consisting of 12 tranches of stock options tied to 12 targets for Tesla’s growth, each of which has been hit. As Musk’s compensation is tied to stock, its value has fluctuated with the price of the company’s shares. In 2021, it was valued at more than $60 billion.
Neither Elon Musk nor Tesla have provided details about how many votes were cast by investors nor what percentage of them approved the pay plan. When originally approved in 2018, 73% of Tesla shareholders supported Musk’s compensation.
After the results were announced, Musk appeared on stage at Tesla’s annual meeting in Austin, Texas, telling the crowd, “I just want to start off by saying hot damn! I love you guys.”
“The vote by Tesla shareholders to reinstate Elon Musk’s compensation package should give Tesla the legal ammunition it needs to have the court officially reinstate it,” business law attorney and Grant Sheldon law firm partner Natela Shenon told Carscoops.
“The whole premise of the judge’s ruling was that she felt the Tesla board was under Elon Musk’s control and was not representing the best interests of the shareholders. This implies that the judge believed Tesla shareholders wouldn’t agree to the package but now that shareholders have voted for it a second time with all of the facts out in the open, the entire crux of the judge’s argument becomes invalid. This is clear evidence that the shareholders are in support of the pay package.”
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