Elon Musk touts his ability to ‘deliver’ as Tesla shareholders approve record-breaking pay
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At least a half-million viewers watched Tesla's shareholder meeting on the livestream on X, while 40,000 watched on YouTube.
PHOTO: REUTERS
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SAN FRANCISCO - Tesla shareholders have approved chief executive Elon Musk’s US$56 billion (S$75.7 billion) pay package
The approval underscores the support that Mr Musk enjoys from Tesla’s retail investor base, many of whom are vocal fans of the mercurial billionaire. The proposal passed despite opposition from some large institutional investors and proxy firms.
Onstage at the annual shareholder meeting in Austin, Texas, Mr Musk described himself as pathologically optimistic. “If I wasn’t optimistic this wouldn’t exist, this factory wouldn’t exist,” he said to applause. “But I do deliver in the end. That’s the important thing.”
He had tipped off late on June 12 that the proposals were garnering huge support.
The approval does not, however, resolve a lawsuit on the pay package in a Delaware court, which some legal experts think could stretch out for months.
The judge invalidated the pay package in January, describing it as “unfathomable”.
Mr Musk may also face fresh lawsuits on the package, which would be the largest in US corporate history. Shareholders had voted for this package in 2018.
“This thing is not over,” said professor Brian Quinn at Boston College Law School.
The Delaware judge will scrutinise the vote and require Tesla to prove the process was not coerced or improperly influenced by Mr Musk, he said.
The judge had criticised Tesla’s board as “beholden” to him, saying the plan was proposed by a conflicted board with close personal and financial ties to its top executive.
On June 13, shareholders also approved a proposal to move the company’s legal home to Texas from Delaware.
They also approved other proposals, including the re-election of two board members: Mr Musk’s brother Kimbal Musk and James Murdoch, son of media mogul Rupert Murdoch.
Shareholders did increase the level of investor control by passing proposals in favor of shortening board terms to one year and lowering voting requirements for proposals to a simple majority, despite board opposition to both.
Tesla on June 13 did not disclose the voting tallies, which are expected to be revealed in coming days.
At least half-a-million viewers watched the meeting on the live-stream on social media platform X, and about 40,000 watched on YouTube.
“This is, firstly, a message that Tesla’s retail shareholders do approve of what’s going on. It will be interesting to see what the exact percentages of the votes are,” said Morningstar Sustainalytics director Lindsey Stewart.
Shareholder approval for the compensation serves as both an endorsement of Mr Musk’s tenure and an acknowledgment that investors do not want to risk the company’s future.
“They are brushing aside essentially key man risks, where Tesla has become even more dependent on Musk going forward,” said business professor Jason Schloetzer from Georgetown University, who has expertise in corporate governance.
In January, Mr Musk threatened to build artificial intelligence and robotics products outside of Tesla if he failed to gain enough voting control.
He shifted the company’s focus to robotaxis, shelving cheaper mass market electric cars, to the concern of some investors who feared the autonomous technology will be hard to perfect.
In an update on Tesla’s performance, Mr Musk said on June 13 that the company recently shipped a record 1,300 Cybertrucks in a week and that plans for volume production of its Semi trucks were in place.
He talked at length about plans for autonomous cars, though he gave no time frame for a launch of self-driving vehicles.
Tesla’s share price has dropped about 55 per cent from its 2021 peak as electric vehicle sales have slowed and Mr Musk’s attention has wavered between Tesla and other companies he runs.
The stock closed up 2.9 per cent on June 13.
“The news lifts a major overhang on the shares, although we wouldn’t be surprised by a ‘sell the news’ reaction on Friday following big gains over the past two trading sessions as the likely outcome became clearer,” CFRA Research analyst Garrett Nelson. REUTERS
