Home Tesla shareholders approve Elon Musk’s $56B pay deal and return to Texas

Tesla shareholders approve Elon Musk’s $56B pay deal and return to Texas


  • Tesla shareholders reapproved Elon Musk's $56 billion pay package and voted to reincorporate in Texas.
  • Despite institutional resistance, retail investors strongly backed Musk at Tesla's annual meeting in Austin.
  • Legal uncertainty remains, with court approval required, but Musk's optimism and board loyalty were emphasized.

Tesla shareholders have voted to both reapprove a pay package for CEO Elon Musk, initially valued at $56 billion, and to reincorporate the electric vehicle company in Texas.

The moves grant Musk substantial victories as he attempts to reassert control over Tesla, with the final payout contingent on Tesla’s share price.

The approval reflects the strong backing the 52-year-old billionaire receives from Tesla’s retail investors, who often vocally support the billionaire. Despite resistance from some major institutional investors and proxy advisory firms, the proposal succeeded.

At Tesla’s annual meeting in Austin, Texas, an excited Musk expressed his appreciation to the attendees: “Hot damn, I love you guys.”

During the event, the CEO of X described his unwavering optimism, which he believes is essential to his achievements: “If I wasn’t optimistic this wouldn’t exist, this factory wouldn’t exist,” he declared, receiving applause. He added, “But I do deliver in the end. That’s the important thing.”

The pay deal is exceptionally lucrative, valued at over 3,000 times the annual earnings of the highest-paid US executive last year.

Will the courts still block Elon Musk from his Tesla pay package?

Despite the vote’s outcome, its legal binding remains uncertain. Legal experts have indicated that it is unclear whether the court that initially blocked the deal will acknowledge the re-vote and reinstate the pay package. “The vote changes nothing,” Mathieu Shapiro, managing partner at Obermayer Rebmann Maxwell & Hippel, told the BBC, stating it only provides Tesla with a chance to seek a more favorable court decision.

Speaking to Reuters, Brian Quinn, a law professor at Boston College, noted, “This thing is not over.” He explained that Delaware judge Kathaleen McCormick would thoroughly examine the vote to ensure it was not influenced by coercion or improper pressures from Musk, saying that Tesla’s board was criticized by the judge for being overly dependent on Musk, influenced by close personal and financial relationships.

As a “parting gift” to Delaware following the decision, Musk posted a picture on X of a cake with the words “Vox Populi, Vox Dei,” which means “the voice of the people is the voice of God.”

Tesla C-suite criticized by Delaware judge

Tesla Chair Robyn Denholm’s credibility was at stake following criticism from Judge McCormick, who described her oversight as “lackadaisical” and characterized the board’s behavior as that of “supine servants of an overweening master”

Musk and Denholm framed the shareholder votes as pivotal for Musk’s continuation with the company. Ivan Frishberg, chief sustainability officer at Amalgamated Bank, also told Reuters, “Elon Musk and Chair (Robyn) Denholm have made this about CEO loyalty and presented the votes as a decision about whether the company can keep Musk.

“That is a lot of pressure but it doesn’t change the fact that good governance is good for the bottom line of a company, and the Tesla board is consistently and clearly deficient on that front.”

In recent months, Denholm has been actively involved in shareholder communications, reiterating the theme “a deal is a deal”. She argued that Musk had met the “ludicrously ambitious” share price and financial milestones set in his original 2018 compensation package.

In private discussions with asset managers, the Financial Times reported that Denholm cautioned Tesla might lose Musk if he didn’t receive his shares. She explained that the stock options were vital for keeping him engaged, as “his passion and hobby is interplanetary space travel,” according to one insider.

In addition, shareholders increased their influence by passing measures that shorten board terms to one year and lower voting thresholds for passing proposals to a simple majority, despite the board’s objections to these changes.

Featured image: Elon Musk on X

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The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Suswati Basu
Tech journalist

Suswati Basu is a multilingual, award-winning editor and the founder of the intersectional literature channel, How To Be Books. She was shortlisted for the Guardian Mary Stott Prize and longlisted for the Guardian International Development Journalism Award. With 18 years of experience in the media industry, Suswati has held significant roles such as head of audience and deputy editor for NationalWorld news, digital editor for Channel 4 News and ITV News. She has also contributed to the Guardian and received training at the BBC As an audience, trends, and SEO specialist, she has participated in panel events alongside Google. Her…

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