Tesla is about to hold a shareholder meeting today (6/13), and the vote on Elon Musk’s $56 billion compensation plan has just concluded. With over 1.3 billion votes in favor (exceeding the 1 billion threshold), supporting Musk to receive the deserved reward, Musk also thanked everyone’s support on Twitter.
Musk’s generous compensation is under scrutiny
Tesla shareholders, large and small, voted together
With over 1.3 billion votes in favor, the impact on the court’s ruling remains unknown
According to a previous report by Chain News, Musk has not received a fixed salary since 2018. Instead, he receives rewards similar to performance bonuses and dividends each time he meets the staged achievements set by the company’s long-term goals. After meeting the target, Musk can purchase Tesla stock at a price of $23.34 per share, with a 5-year lock-up period.
Tesla shareholders have been somewhat hesitant about Musk’s previous acquisition of Twitter (now renamed X) and have finally taken the matter to court, seeking to annul the 2018 compensation plan awarded by the Tesla board to Musk.
The judge responsible for this case, Kathaleen McCormick, made a ruling in January declaring the plan invalid. The judge believed that the Tesla board was not independent enough (being too influenced by Musk) and that the governance process for the allocation and stock value was “unfair” to other shareholders.
Therefore, before the shareholder meeting, Tesla invited all shareholders to vote online together, hoping to seek court approval for the restoration of the plan.
According to The New York Times, Ron Baron, Chairman of investment fund management company Baron Capital, stated 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!”
Ark Invest CEO Cathie Wood, who has always supported Tesla, also stated on Twitter: “He has achieved remarkable success and deserves a corresponding reward.”
Ark also recently announced its expectations for Tesla’s stock price, which could reach $2,600 per share by 2029, showing a very positive outlook on Tesla’s fundamentals.
Voting has just closed, with over 1.3 billion votes in favor (exceeding the 1 billion threshold), supporting the restoration 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 judgment. Tesla also acknowledged in a regulatory filing that voting in favor “may not fully resolve the issue.”
Tesla
compensation case
Elon Musk
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