This compensation plan, estimated at $56 billion in 2018 when it was validated by shareholders, was canceled in January by a Delaware judge.
Tesla shareholders approved Thursday the enormous compensation plan of its boss, Elon Musk, as well as the transfer of the automobile manufacturer’s domicile from Delaware (east) to Texas (south), according to the results announced during the general assembly. This compensation plan, estimated at $56 billion in 2018 when it was validated by shareholders, was canceled in January by a Delaware judge. But the board of directors decided, in April, to resubmit it to the general assembly. “Tesla’s two shareholder resolutions are currently adopted by a large majority!”Elon Musk had already announced late Wednesday evening in the United States.
“Time is counted”displayed Wednesday afternoon the votetesla.com site created for the occasion, while a countdown ticked off the seconds until 11:59 p.m. in Texas (04:49 GMT), the closing time of the poll. “Your vote is crucial to the future growth and success of Tesla and the value of your investment”, insisted the electric vehicle specialist in a video explaining, with the help of his humanoid robot Optimus, how to vote. To encourage votes, the group put into play, by drawing lots, fifteen visits to the mega factory in Austin (Texas) with Elon Musk and Franz von Holzhausen, Tesla’s chief designer, as guides.
In addition to the dedicated site and Optimus’ help, numerous messages have been published on X, as well as advertisements on the internet. Worthy of an electoral campaign. The group was counting on small investors to make the difference against large investors, several of whom had announced that they were opposed to the remuneration package. These institutional investors did the same on March 21, 2018, when this financial package was submitted to shareholders at an extraordinary general meeting. THE “Yes” won by 73%, excluding the votes of Elon Musk and his brother Kimbal. The package was estimated at $56 billion and provided for stock distributions for ten years, based on specific objectives.
Tesla stock was worth $177.29 on Wednesday
But a shareholder’s appeal before a Delaware court resulted in its annulment by a judge at the end of January. In mid-April, the board of directors undertook a maneuver to get it back on track by including it on the menu for Thursday’s ordinary general meeting. “The board supports this compensation plan. We believed in it in 2018, asking Elon to pursue remarkable goals to grow the company”, the council then argued. Tesla shares were worth $20.70 at Wall Street’s close the day before the 2018 AGM, and $177.29 at close on Wednesday.
According to the Wall Street Journal, the “Yes” and the “No” were neck and neck on Tuesday. “We think investors will need to buckle up ahead of what is expected to be a volatile week for their stocks.”, warned Garrett Nelson, analyst at CFRA Research. According to him, individual shareholders hold around 40% of the manufacturer’s capital. The fear, he underlined like other experts and shareholders favorable to the plan, is that, in the event of refusal by the AG, the billionaire will turn away from Tesla to devote himself more to his other companies (SpaceX, X, xAI, Starlink, etc.).
However, for many, Tesla is nothing without Elon Musk. Tesla represents the largest asset in its portfolio (around $3 billion as of March 31) but it remains a little behind Vanguard, the leading investor with a share of 7.23% at the end of 2023. The latter refused to reveal its vote and BlackRock, second investor with 5.9%, did not respond.
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According to the Wall Street Journal, in 2018 the first voted against, while the second approved the plan. The California Teachers’ Pension Fund (CalSTRS), one of the three largest in the United States, has decided: no. “This compensation plan is ridiculous”launched Chris Ailman, its investment director, on CNBC, emphasizing that it amounted to paying Elon Musk “140 times the average salary of an employee”. Same refusal from the Norwegian sovereign fund NBIM – the largest in the world and shareholder of Tesla with 0.98% at the end of 2023 – as in 2018.