Tesla shareholders are set to approve Elon Musk’s $56 billion remuneration package by a significant margin before the company’s important annual general meeting later today. The compensation package, the largest ever granted to a CEO of a U.S. company, will be subject to an investor vote after being previously rejected by a U.S. court this year. Shareholders will also vote on Musk’s proposal to relocate Tesla’s legal base to Texas.
Several investors, including Norway’s sovereign wealth fund and the California State Teachers Retirement System, have indicated their intent to oppose the compensation package. Proxy advisory firms Glass Lewis and Institutional Shareholder Services have also advised shareholders to reject the pay.
On the eve of the meeting, Musk suggested on X (formerly Twitter) that investors overwhelmingly supported both the compensation package and the Texas relocation: “Both Tesla shareholder resolutions have now passed by large margins! Thank you for your support!!”
The results will be disclosed at Tesla’s headquarters in Texas at 4:30pm ET (9:30pm UK time).
Even if the remuneration package is approved, Musk may encounter further obstacles, including potential litigation. Legal experts doubt that the Delaware court that rejected the initial package would accept a new, nonbinding vote to reinstate it.
Originally approved by Tesla’s board in 2018, the compensation has faced legal challenges from shareholders. Judge Kathleen McCormick of Delaware raised concerns about the size and necessity of the package in her January ruling.
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In her ruling, McCormick questioned the necessity of the compensation plan, stating, “Perhaps swayed by the ‘all-positive’ rhetoric or enthralled by Musk’s superstardom, the board never asked the $55.8 billion question: Was this plan truly necessary for Tesla to retain Musk and achieve its goals?”
Source: www.theguardian.com
