Tesla is about to hold a shareholders’ meeting today (6/13), and the vote on Elon Musk’s $56 billion compensation plan has just ended. With over 1.3 billion votes in favor (exceeding the 1 billion threshold), supporting Musk to receive his deserved compensation, Musk also thanked everyone for their support on X.
Tesla shareholders and small shareholders voted together
With over 1.3 billion votes in favor, it is still unknown whether it will affect the court’s decision
According to previous reports by Chain News, Musk has not received a fixed salary since 2018, but instead, after the company’s set long-term goals are split into phased achievements, he will receive rewards similar to performance bonuses and dividends each time a goal is achieved. After meeting the criteria, Musk can subscribe to Tesla shares at a price of $23.34 per share, but there is a 5-year lock-up period.
Tesla shareholders have been somewhat dissatisfied with Musk’s previous acquisition of Twitter (now renamed X) and have not been able to focus too much on Tesla’s operations. Finally, they went to court to request the cancellation of the 2018 compensation plan awarded to Musk by the Tesla board of directors.
The judge responsible for this case, Kathaleen McCormick, ruled in January that the plan was invalid. The judge believed that Tesla’s board of directors was not independent enough (too influenced by Musk) and that the governance process for the allocation and the stock value were “unfair” to other shareholders.
Therefore, before the shareholders’ meeting, Tesla invited all shareholders to vote online together, hoping that with the shareholders’ reapproval, they could ask the court to reinstate the plan.
According to The New York Times, Ron Baron, chairman of investment fund management company Baron Capital, said in a letter urging other shareholders to reapprove Mr. Musk’s compensation plan:
Without his tireless efforts and uncompromising standards, there would be no Tesla. Tesla is Elon!
And Cathie Wood, CEO of Ark Invest, who has always supported Tesla, also stated on X:
He has achieved astonishing success and should receive appropriate rewards.
Ark also recently released its expectations for Tesla’s stock price, with a chance to reach $2,600 per share by 2029. Showing strong confidence in Tesla’s fundamentals.
The vote has just ended, with over 1.3 billion votes in favor (exceeding the 1 billion threshold), supporting the reinstatement of Musk’s compensation plan, which will affect Musk’s approximately 7% stake in Tesla.
However, even if shareholders agree, there is no clear provision on whether it will affect the court’s decision. Tesla also admitted in a regulatory filing that voting in favor “may not fully resolve the issue.”
Tesla
Compensation case
Elon Musk
Further reading
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