Musk believes that Tesla shareholders will still pay him a record $56 billion in compensation - FT
Kyiv • UNN
Elon Musk claims that Tesla shareholders will vote in favor of his $56 billion compensation package and proposal to move the company's headquarters to Texas.
Tesla CEO Elon Musk said that shareholders intend to vote on his $56 billion remuneration and the proposal to record the electric vehicle manufacturer in Texas at their annual meeting. UNN writes about this with reference to Financial Times.
Both Tesla shareholder resolutions are currently passed by a wide margin
According to Musk, the results presented in the charts are temporary, and they may change during the annual meeting. However, if the two resolutions were approved, it would be considered a major victory for Mercurial's CEO, who has been advocating for the largest pay package in the history of corporate America.
Tesla's board of directors has encouraged investors to re-approve Musk's $56 billion compensation, first awarded in 2018, which was canceled due to a Delaware court ruling in January over concerns about the board's transparency and independence. This prompted Musk to advocate for moving the company's registration from Delaware to Texas.
If Musk successfully gains investor support for his package, which includes stock options, his stake in the company would increase to more than 20 percent from 13 percent if these options were exercised. Tesla shares rose 3.9 percent on the day before the vote.
The shareholder vote was closely monitored, and any defeat could seriously undermine Musk's credibility at a time when Tesla is facing fierce price competition from Chinese electric car makers and billions of dollars in increased costs due to investments in artificial intelligence and robotics.
Tesla CEO Robin Denholm has led a campaign in support of both proposals, comparing her task to climbing Mount Everest. The company has received support from leading investment trusts, including Baillie Gifford, Katie Wood's Ark Investment Management, and Ron Baron, another major Tesla investor.
However, Musk's remuneration package has caused division among investors: the Norwegian oil fund, which has a capital of $1.7 trillion, opposed the deal because of the size of the remuneration, its structure, and its ability to reduce “key person risk.” The CEO of Calpers, the largest U.S. public pension fund and one of Tesla's 25 largest shareholders with a $1.67 billion stake, also said he would vote against the deal. Two major proxy advisory firms, ISS and Glass Lewis, have advised shareholders to reject the large package.
In the final phase of the campaign, Tesla stepped up its efforts by recruiting current and former high-ranking employees and engineers to publicly support Musk on social media. The company also offered tours of the Tesla factory with Musk as an incentive for its retail investors to vote in their favor.
Tesla has a significant share of retail investors, who own about 30 percent of the company, and given the high demands on the success of both votes, including the move to Texas, their support is crucial.
A simple majority of votes is required for the compensation vote, excluding shares held by Musk and his brother Kimball. The decision to relocate to Texas requires a majority of all outstanding shares, with absentee votes automatically counted as “against” votes.
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