Tesla Shareholders Meeting Commences Today with Over 13 Billion Votes in Favor of Musks High Compensation
Tesla will hold a shareholder meeting today (6/13), and the vote on Elon Musk’s $56 billion compensation plan has just ended. With over 1.3 billion votes in favor (exceeding the 1 billion threshold), supporting Musk to receive the rightful reward, Musk also expressed his gratitude on Twitter.
Musk’s generous compensation is under scrutiny
Tesla shareholders voted together
With over 1.3 billion votes in favor, whether it will affect the court’s decision remains unknown
According to previous reports by Chain News, Musk has not been receiving a fixed salary since 2018. Instead, he receives rewards similar to performance bonuses and dividends each time he achieves the phased performance goals set by the company. After meeting the target, Musk can purchase Tesla stock at a price of $23.34 per share, with a 5-year lock-up period.
Tesla shareholders have been somewhat dissatisfied with Musk’s previous acquisition of Twitter (now renamed X) and have finally taken legal action to request the court to revoke Tesla’s board’s 2018 compensation plan for Musk.
The judge responsible for this case, Kathaleen McCormick, made a ruling in January declaring the plan invalid. The judge believed that Tesla’s board was not independent enough (too influenced by Musk) and that the governance process of the allocation and the stock value was “unfair” to other shareholders.
Therefore, before the shareholder meeting, Tesla invited all shareholders to vote online, hoping that with the shareholders’ re-approval, they could appeal to the court to reinstate the plan.
According to The New York Times, Ron Baron, chairman of investment fund management company Baron Capital, urged other shareholders to re-approve Mr. Musk’s compensation plan in a letter, stating:
Without his relentless effort and uncompromising standards, there would be no Tesla. Tesla is Elon!
Cathie Wood, CEO of Ark Invest, who has always supported Tesla, also stated on Twitter:
He has achieved remarkable success and should be rewarded accordingly.
Ark Invest also recently released its expectations for Tesla’s stock price, mentioning a potential price of $2,600 per share by 2029. This shows a strong belief in Tesla’s fundamentals.
Voting has just ended, with over 1.3 billion votes in favor (exceeding the 1 billion threshold), supporting the reinstatement of Musk’s compensation plan, which will affect Musk’s approximately 7% stake in Tesla.
However, even with the shareholders’ approval, there is no clear provision on whether it will affect the court’s decision. Tesla also acknowledged in a regulatory filing that voting in favor “may not completely solve the problem.”
Tesla
Compensation case
Elon Musk
Further reading
Musk hints at IPO for subsidiary companies? Bloomberg teaches you how to buy SpaceX
Musk ventures into streaming platform, X TV set to debut? First collaboration with NFL
