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Elon Musk claims Tesla shareholders voted for his $56 billion pay package

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Elon Musk says Tesla shareholders are on track to approve his $56 billion pay package, Reuters reports. This is intended to be a tribute to his leadership and an encouragement for Musk to focus on the production of Tesla's electric vehicles. The result will be announced at a meeting at Tesla's headquarters in Texas.

“Thank you for your support!” – he wrote Elon Musk on its social media platform X (formerly Tweeter). Additionally, he posted a show chart showing that the resolution – and a subsequent vote to move the company's headquarters to Texas – will be passed by a majority vote, although shareholders can change their vote until a vote takes place at the annual meeting. Additionally, Musk has threatened to build artificial intelligence and robotics products outside of Tesla if he fails to get enough votes.

Reuters, in turn, wrote today that “a person familiar with the preliminary voting results confirmed that Elon Musk published accurate calculations.” The result will be announced at a meeting at Tesla's Texas headquarters on Thursday. This is the second vote. The first was invalidated by the court, which said its approval process in 2018 was “highly flawed.” Currently, the management is trying to convince shareholders to once again support paying out a huge package to the CEO.

– Even if shareholders approve the old package, it is unclear whether a court in Delaware will recognize this vote as effective, said Adam Badawi, a law professor at the University of California, Berkeley, as quoted by Reuters. Musk may have to wait years to find out whether he will get his pay package back as appeals go to the Delaware Supreme Court.

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Musk is a guarantor of the future for Tesla

“Shareholder approval would be both an expression of support for Musk's position and a confirmation that investors do not want to risk the company's future,” writes Reuters. The agency explains that Tesla's share price has more than halved since peaking in 2021, when Musk began selling billions of dollars worth of his shares, in part to help finance the Twitter purchase. This then raised concerns about their excessive dispersion. Musk currently heads six companies, including rocket builder SpaceX, social media giant X – formerly Twitter – and artificial intelligence company xAI. Musk created the latter in 2023.

Board chairwoman Robyn Denholm, in turn, said in a regulatory filing earlier this month that restoring the compensation package was necessary to “keep Elon's attention and motivate him,” Reuters writes. He added that the board concluded that Musk deserved the package because he had achieved all of his ambitious market value, revenue and profitability goals.

– This gives Musk credibility and dispels some investor concerns about his declining interest in Tesla – commented Sandeep Rao, senior researcher at Leverage Shares, which owns Tesla shares, quoted by Reuters.

Tesla shares gained 3.6% on Thursday's session.

The package – worth about 300 times what the highest-paid boss in the world earned last year USA – gained the support of 73 percent. shareholders who voted six years ago.

Tesla's CEO could still face a lengthy legal battle to convince a Delaware judge who in January invalidated the package, calling it “incomprehensible.” A Delaware judge ruled against the package, saying the plan was proposed by a conflicted board with close personal and financial ties to its top executive.

The board viewed the shareholder vote as a way to strengthen its appeal of the ruling, in which a judge cited the board's failure to fully inform shareholders before approving a compensation package in 2018. But Tesla also acknowledged in securities filings that a favorable ratification may not resolve salary dispute.

Author:as above, pkarp/ams

Main photo source: Frederic Legrand – COMEO / Shutterstock

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