Tesla shareholders Reapprove Elon musk’s $56 Billion Pay Package
WILMINGTON, DE - Tesla shareholders overwhelmingly voted to reinstate a controversial $56 billion pay package for CEO Elon Musk on Thursday, possibly resolving a legal battle that saw the company relocate its incorporation from Delaware to Texas. The vote comes as the Delaware Supreme Court reviews a lower court’s decision that initially invalidated the 2018 compensation plan, finding it excessive and unfairly benefiting Musk.
The reapproval is a notable victory for Musk, whose remuneration is tied to ambitious company goals. The original package, granted in 2018, promised Musk options to buy roughly 11% of Tesla’s stock if the company achieved specific revenue and profit targets. Institutional investors previously rejected the plan, raising concerns about its size and structure, but Musk’s reliance on Tesla’s significant base of retail investors proved decisive.
Several major institutional investors, including Norway’s sovereign wealth fund – the world’s largest – and the California Public Employees’ Retirement System (CalPERS) – the largest public pension fund in the United States – had previously opposed the package. This opposition prompted Tesla to seek shareholder approval again after a Delaware judge ruled the initial agreement invalid, citing a lack of fully informed consent and excessive compensation.
Thursday’s vote saw both Musk and his brother, Kimbal Musk, a Tesla board member, exercising their voting rights. The outcome now rests with the Delaware Supreme Court, which will determine whether the re-vote adequately addresses the concerns raised in the initial ruling. If upheld, the package could incentivize Musk to continue driving Tesla’s growth, but also represents a substantial financial commitment for the company and its shareholders.
