Tesla shareholders approved CEO Elon Musk’s $56 billion pay package, the electric vehicle-maker said, a big thumbs-up to his leadership and an incentive to keep his focus on his biggest source of wealth. The approval underscores the support that Musk enjoys from Tesla’s retail investor base, many of whom are vocal fans of the mercurial billionaire. The proposal passed despite opposition from some large institutional investors and proxy firms.
Onstage at the annual shareholder meeting in Austin, Texas, Musk described himself as pathologically optimistic. “If I wasn’t optimistic this wouldn’t exist, this factory wouldn’t exist,” Musk said to applause. “But I do deliver in the end. That’s the important thing.”
He had tipped off earlier that the proposals were garnering huge support. The approval does not, however, resolve a lawsuit on the pay package in a Delaware court, which some legal experts think could stretch out for months. The judge invalidated the pay package in January, describing it as “unfathomable.”
Musk may also face fresh lawsuits on the package, which would be the largest in USA corporate history. Shareholders had voted for this package in 2018. “This thing is not over,” said Brian Quinn, a professor at Boston College Law School. The Delaware judge will scrutinize the vote and require Tesla to prove the process was not coerced or improperly influenced by Musk, he said.
The judge had criticised Tesla’s board as “beholden” to him, saying the plan was proposed by a conflicted board with close personal and financial ties to its top executive. Recently, shareholders also approved a proposal to move the company’s legal home to Texas from Delaware. They also approved other proposals including the re-election of two board members: Musk’s brother Kimbal Musk and James Murdoch, son of media mogul Rupert Murdoch.
Shareholders did increase the level of investor control by passing proposals in favour of shortening board terms to one year and lowering voting requirements for proposals to a simple majority, despite board opposition to both.
