#ElonMusk #TeslaShareholders #ElectricVehicles
Elon Musk Confident of Victory in $56 Billion Tesla Pay Vote
Elon Musk announced on Wednesday that Tesla shareholders are likely to approve his contentious $56 billion compensation package and the electric vehicle manufacturer's proposed relocation from Delaware to Texas. The annual meeting is scheduled for Thursday.
Two key resolutions are under consideration by shareholders. The first pertains to the approval of the $56 billion pay package, initially endorsed by shareholders in 2018 but invalidated by a Delaware judge in January. The second resolution proposes transferring Tesla's state of incorporation from Delaware to Texas, following Musk's social media poll on X earlier this year, which garnered significant support.
Musk reported that both resolutions are gaining significant support, without providing specific figures. The initial pay package, which included ambitious financial performance and market value targets for Tesla, was approved when the company was on the brink of becoming a major global electric automaker. However, the landscape has shifted significantly since then.
Tesla now faces a slowing growth rate and intensified competition, particularly from Chinese players. Musk's acquisition of Twitter, now known as X, and his increased focus on other projects, such as Neuralink and xAI, have raised concerns. Critics argue that Musk's distraction from Tesla due to his other ventures warrants reconsideration of the compensation package, which is the largest in U.S. corporate history. They also point to Tesla's recent financial performance as a reason to vote against the deal.
Institutional Shareholder Services, Glass Lewis, and several notable shareholders, including the California State Teachers' Retirement System and Norway's sovereign wealth fund, have announced their intention to vote against the package. Proponents of the compensation argue that Musk is indispensable to Tesla's future success and that the pay package has incentivized him to remain with the company. They believe that Musk's departure would negatively impact Tesla.
Ron Baron, a billionaire investor and long-term Tesla shareholder, has publicly stated that he will vote in favor of the pay package, emphasizing Musk's importance to the EV maker. Major investors, such as Vanguard and Blackrock, have yet to disclose their voting intentions.
Original Article: https://www.cnbc.com/2024/06/13/elon-musk-says-tesla-shareholders-likely-approved-his-56-billion-pay-deal.html
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