Elon Musk forecasts landslide win in vote over his pay

Posted on June 13, 2024Comments Off on Elon Musk forecasts landslide win in vote over his pay

Elon Musk is set to score a record-breaking compensation package according to the latest shareholder voting numbers published by the Tesla CEO himself on his social media site X.

Several proposals are currently being resolved, but two in particular have made the headlines.

The first is a vote on whether Mr Musk should be awarded a pay packet worth $56 billion (~A$84 billion), after the same package was annulled by a Delaware judge earlier this year.

In addition, Mr Musk wants to reincorporate Tesla from Delaware to Texas in response to the January ruling.

If current voting trends continue, both proposals look set to be approved based on the data posted by Mr Musk on Thursday.

As part of a social media post thanking his supporters, the Tesla CEO published a pair of graphs tracking the total number of for/against votes for each proposal since May 8.

The most recent figures for May 12 have the ‘for’ vote winning on both counts.

“Both Tesla shareholder resolutions are currently passing by wide margins!” Mr Musk posted on X.

“Thanks for your support!!”

The final outcomes of the voting process will be announced as part of a shareholder meeting which will be livestreamed at 6:30am AEST time on Friday, June 13.

Mr Musk’s huge payday in the form of stock options was first agreed upon in 2018, backed by 73 per cent of shareholders at the time.

However, Chancellor Kathaleen McCormick of the Delaware Chancery Court intervened to block the deal in January this year after Tesla investor Richard Tornetta sued Mr Musk for breaching shareholder trust in awarding himself the “unfathomable sum”.

The judge’s main reasons for revoking the compensation deal were Mr Musk’s effective control of the board and the compensation committee, the deal being neither fair nor necessary, and that shareholders approved it without knowing how the deal came about.

The contested performance-based bonus was “the largest potential compensation opportunity ever observed in public markets,” according to the court filing.

In the wake of the verdict in Delaware, Tesla has drawn up a new pay deal for Mr Musk and proposed to reincorporate the company in Texas to bypass the legal roadblocks that have thwarted Mr Musk to this point.

Many large US corporations such as Tesla and Facebook are incorporated in Delaware due to its lax taxation approach towards companies that don’t do business in the state.

The current pay dispute comes in the aftermath of a rare drop in Tesla sales in the first quarter of 2024, with the electric vehicle (EV) pioneer reporting its lowest quarterly sales since 2022. 

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