Shareholders of Tesla gathered today to decide the fate of CEO Elon Musk’s $56 billion pay package, pondering the crucial question of whether Musk will retain his exceptional compensation. With Musk expressing optimism about the passage of his pay package late on Wednesday, official confirmation is expected to be announced later today, driving an increase in Tesla stock prices during pre-market trading.
The uproar surrounding Musk’s all-stock pay package, initially granted in 2018, has been a contentious battle. Following a Delaware court’s ruling earlier this year that invalidated the award due to Tesla’s board failing to act in the best interests of shareholders, Musk and Tesla’s board, under the leadership of chair Robyn Denholm, have campaigned vigorously to gain approval for a new pay package closely resembling the original one.
Leading up to the shareholders’ verdict, Musk and Tesla face multiple challenges. The Employees’ Retirement System of Rhode Island recently filed a lawsuit in Delaware accusing Musk and his brother, Kimbal Musk, of selling $30 billion of stock using undisclosed information. Additionally, reports have surfaced regarding Musk’s alleged inappropriate relationships with SpaceX employees and accusations of sexual harassment and retaliation against him by former SpaceX employees.
The ongoing drama surrounding the vote has escalated in recent weeks, culminating in Denholm’s open letter urging shareholders to support Musk’s compensation package. Denholm emphasized the necessity of motivating Musk to ensure the company achieves remarkable growth and retains his undivided attention, a sentiment that has raised concerns among observers.
While debates surrounding Musk’s pay package persist, analysts predict a high likelihood of approval, albeit with some opposition from proxy adviser firms and major shareholders. Amidst the uncertainty, the future of Tesla hangs in the balance, with Musk’s influence deemed critical for the company’s direction and leadership. The outcome of this pivotal decision will undoubtedly shape the trajectory of Tesla and Elon Musk’s tenure as CEO.