Elon Musk wins record-breaking Tesla pay deal from shareholders


Tesla shareholders have backed a record-breaking pay package for boss Elon Musk and approved a plan to move the firm’s legal headquarters to Texas.

The results are a victory for the billionaire, who had campaigned fiercely for the payout, which was worth $56bn (£43.8bn) when it was first agreed in 2018.

The company had asked shareholders to re-approve the deal, after a judge in Delaware voided the package earlier this year.

The company did not immediately disclose the margin of the vote.

Mr Musk had previewed the results in a post on his social media company, X, formerly known as Twitter, where he thanked his supporters.

Shares in the company closed up nearly 3% after Mr Musk’s announcement.

Analyst Dan Ives of Wedbush Securities said the gains signalled confidence from investors that the deal would go through, diminishing the threat that Mr Musk might leave the company.

“In a nutshell, if this proposal went south a lot of bad things and scenarios could have happened including Musk beginning a path to not being CEO of Tesla,” he wrote in a note.

However, legal experts have said it is not clear if a court that blocked the deal will accept the re-vote, which is not binding, and allow the company to restore the pay package.

Earlier this year, a Delaware judge voided the compensation deal after a small investor sued.

The judge ruled the sum was “unfair” and the process for determining the package, by a board dominated by Mr Musk, was “deeply flawed”.

Tesla called the decision “fundamentally unfair, and inconsistent with the will of the stockholders”.

The company then submitted the deal to another vote – and asked its shareholders to back a plan to reincorporate the company outside the state of Delaware.

The board said Mr Musk deserved the package because Tesla achieved its ambitious targets under his leadership and that it was necessary to ensure he remains dedicated to the company.

Tesla executives also expressed support for the package in social media posts, saying that Mr Musk is crucial to the company’s success.

Meanwhile, Mr Musk promised a personal tour of Tesla’s factory in Texas to some shareholders who cast votes.

The package – worth an estimated 300 times what the top-earning boss in the US made last year – won backing from 73% of shareholders who voted six years ago.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *