San Francisco, CA – Tesla, the electric car company based in Palo Alto, has been facing challenges as its shares plummeted by 28% this year. Issues such as slower growth in China, a product recall, and controversy surrounding its CEO, Elon Musk, have cast a shadow over the company’s performance.
Despite these setbacks, Tesla is pushing for a record-breaking $56 billion pay deal for Elon Musk, the largest ever granted to an executive at a US-listed company. The pay package, granted in 2018, was based on targets for Tesla’s stock value, revenue, and profitability, all of which were surpassed by 2022.
In January, a court voided the pay arrangement, questioning the necessity of compensating Musk at such high levels. Tesla has since organized a re-vote, urging investors to endorse the deal again, framing it as a vote on the current state of the company and Musk’s leadership.
Robyn Denholm, Tesla’s chair, emphasized the importance of Musk’s continued dedication to the company, warning that he may step back if the pay package is not approved. Denholm appealed to shareholders to stand by the deal, stating that Musk has not been paid for his work for the past six years.
Investors are now faced with endorsing two proposals: Musk’s pay deal and the relocation of Tesla’s incorporation from Delaware to Texas. Analysts predict that Tesla is likely to win approval for Musk’s remuneration, albeit not by a wide margin.
The vote over Musk’s pay will not only impact his wealth but also test the influence of proxy advisers, who have come out against the pay package. Although Musk has received support from some backers who credit him for Tesla’s success, challenges remain from unions seeking fairer treatment for Tesla workers and concerns over Musk’s divided attention among his various ventures.
As Tesla gears up for the annual meeting to decide on Musk’s pay and other crucial matters, the outcome may shape the company’s future direction and shed light on the dynamics between executives, shareholders, and corporate governance.