- At Thursday’s annual shareholder meeting, Tesla (NDAQ:TSLA) investors voted in favour of CEO Elon Musk’s US$55.8 billion pay package and moving the company’s state of incorporation to Texas
- The vote is widely viewed as vindication for Musk, whose extensive history of erratic behaviour precedes him
- Tesla designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products
- Tesla stock has given back 28.46 per cent year-over-year, but has added 1,181.98 per cent since 2019
At Thursday’s annual shareholder meeting, Tesla (NDAQ:TSLA) investors voted in favour of CEO Elon Musk’s US$55.8 billion pay package and moving the company’s state of incorporation to Texas.
Musk’s pay package, the largest ever awarded to a U.S. corporate executive, passed in 2018 with 73 per cent of shareholder votes, but was nullified in January by Delaware Chancery Court Judge Kathaleen St. Jude McCormick, who cited Tesla’s failure to adequately disclose terms under the package, as well as board director conflicts of interest – Musk’s brother Kimbal has been on the board since 2004 and was re-elected Thursday. McCormick will issue a final ruling early next month.
Now that Tesla is officially incorporated in Texas, as announced in Friday’s news release, it can have its case heard within the Texas business court system – should its appeal of McCormick’s decision fall through – supported by shareholders’ second approval of Musk’s compensation plan. His potential payout has fallen to about US$47 billion, given Tesla stock’s underperformance year-over-year, and would require him to hold vested shares for five years before selling.
Shareholders’ support is a sign of confidence in Musk’s leadership, which has resulted in four consecutive years of exponential net income growth, from US$690 million in 2020 to US$15 billion in 2023, despite him dividing his time between five other co-founded companies – SpaceX, xAI, X Corp, Neuralink and OpenAI – and his history of erratic behaviour, including drug use, a long list of inflammatory comments, and instituting Tesla’s largest layoff earlier this year and rehiring certain employees soon after.
During the annual meeting, Musk suggested that Tesla is working on three new models and noted that the company’s Supercharger, Semi-truck and Cybertruck segments are growing, with output for the latter hitting a recent record of 1,300 per week, setting the stage for continued shareholder value creation as the electric vehicle (EV) tailwind furthers its global reach.
About Tesla
Tesla designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its consumer vehicles include the Model 3, Y, S, X and the Cybertruck.
Tesla stock (NDAQ:TSLA) is up by 0.44 per cent, trading at US$183.28 per share as of 9:37 am ET. The stock has given back 28.46 per cent year-over-year, but has added 1,181.98 per cent since 2019.
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(Top photo of Elon Musk at Tesla’s lithium refinery in Corpus Christi, Texas: Tesla)
