Palo Alto, California – In a monumental move in the world of U.S. corporate pay packages, Tesla shareholders granted CEO Elon Musk an astonishing $46 billion pay deal. The shareholder vote results were announced during Tesla’s annual meeting, sparking a standing ovation from attendees. Musk, anticipating the victory, expressed his gratitude to shareholders for approving the pay package by “wide margins.”
During the shareholder meeting, Musk exuberantly thanked the attendees and highlighted Tesla’s accomplishments in selling electric vehicles, emphasizing the company’s positive impact on combating climate change. The pay package has been a subject of contention, with critics labeling it as excessive while supporters argue it is crucial to retain Musk at Tesla and prevent him from pursuing other ventures.
Following Musk’s premature celebration of the vote, Tesla stock surged by 3% in Thursday’s trading, indicating widespread support for the pay package as a means to secure Musk’s future at the company. Analyst Dan Ives from Wedbush Securities described the moment as a triumph for Musk and Tesla shareholders, recognizing the significance of retaining Musk as CEO.
Despite the initial approval of the pay deal by Tesla shareholders in 2018, a Delaware court ruling earlier this year overturned the plan. To address the issue, Tesla shareholders also voted to relocate the company’s legal jurisdiction from Delaware to Texas, potentially impacting the realization of Musk’s payout.
The pay deal, structured around stock options tied to Tesla’s performance milestones, would potentially allow Musk to purchase 304 million shares. Musk’s total net worth, estimated at $203 billion, places him as the world’s third-richest individual. The debate over Musk’s payout raises questions on the impact of extravagant CEO packages on performance, with research suggesting that excessive pay may not necessarily correlate with better results.
In the midst of shareholder approval and continued scrutiny, the future of Musk’s substantial pay package remains uncertain. The ongoing saga underscores the complexity of executive compensation and its implications for corporate governance and investor relations.