• Tesla shareholders should vote on share package for Musk
• ‘Deeply flawed’: Delaware court declared package invalid
• Texas instead of Delaware: Musk Group is looking to move
On Wednesday, the Tesla boss’s billion-dollar compensation package is once again causing concern Elon Musk for international headlines.
Tesla wants to reintroduce Musk’s salary package in the double-digit billion range
As Tesla writes in a preliminary statement, the company wants to ask its shareholders to reinstate CEO Elon Musk’s $56 billion pay package from 2018. Earlier this year, a Delaware court invalidated the record pay package, calling it “deeply flawed.” The company announced the move in a preliminary statement on Wednesday. The move marks a controversial return to an earlier plan marred by legal problems.
Controversy surrounding the Delaware court’s decision
The Delaware Chancery Court’s decision to invalidate Elon Musk’s pay package sparked controversy. The chairwoman of the court found that Musk controlled the company rather than Tesla’s board of directors. The board’s compensation committee did not negotiate the terms of the deal with Musk. Rather, it works “almost as an advisory body alongside him.” Tesla challenged the court’s decision, arguing that substantial evidence was ignored and errors of fact and legal conclusions were made.
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Is Tesla turning its back on Delaware?
Tesla said the court decision creates a “fundamental problem for the company.” As a result, Tesla also plans to ask shareholders to allow the company to move its headquarters from Delaware to Texas. Musk had already threatened this in advance if the court ruling was unfavorable. The relocation of the company’s headquarters could have far-reaching effects and is also accompanied by controversy. Delaware has long been a preferred location for businesses, particularly for tax reasons. At least Musk’s view of the US state seems to have changed after the court ruling. The tech visionary now prefers Texas, which is considered to be particularly economically liberal. In recent years, the jack-of-all-trades has made several negative comments about the regulatory environment in California.
How are Tesla shareholders reacting?
Shareholders are reacting rather negatively to the news that Tesla wants to reintroduce the billion-dollar salary package for Musk. Tesla shares ultimately lost 1.11 percent at $155.45 in NASDAQ trading on Wednesday. In the past few days, however, the shares of the electric car pioneer have suffered. Investors were particularly unsettled by the company’s announcement that it would lay off 10 percent of its employees. It is unmistakable that Tesla is struggling with a major decline in demand and at the same time the competition – especially from China – is becoming more and more serious. A number of analysts recently cut their Tesla price targets.
IG Metallers on the Tesla works council are opposing this Job cuts
The works councils at the car manufacturer Tesla in Grünheide, organized in IG Metall, want to oppose staff cuts. “As with all our colleagues around the world, we are also afraid in the factory,” said a statement from union members on the Tesla works council on Wednesday. They called on management to stop the announced job cuts. Rather, employees should be transferred to areas with a shortage of personnel or given further qualifications. “We can only manage to further ramp up production and expand the plant together.” IG Metaller called on management to inform the workforce about its plans.
The majority of the Tesla works council in Grünheide – the US car manufacturer’s only European plant – is not unionized. IG Metall has long been calling for better working conditions at Tesla and commitment to a collective agreement.
Tesla boss Elon Musk wants to cut more than one in ten jobs in the company in view of the slump in the market for electric cars and weak sales worldwide. The company has not yet stated how many jobs in the factory in Grünheide may be affected.
Editorial team finanzen.net / (dpa-AFX)
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