Musk says shareholders hugely in favor of his $56B Tesla pay

Musk says shareholders hugely in favor of his $56B Tesla pay
He also said they back the firm's move to Texas.
JUN 13, 2024
By  Bloomberg

Tesla Inc. shares jumped in early trading after Elon Musk said shareholders voted “by wide margins” in favor of re-approving his compensation package and moving the company’s state of incorporation to Texas.

The chief executive officer posted about the voting results on X, the social media site he owns, hours before Tesla’s annual meeting Thursday in Austin, sharing two charts suggesting the proposals had been approved. Tesla shares jumped as much as 7.2% before the start of regular trading.

Musk and Tesla’s board have spent the last two months rallying support for the measures, putting particular emphasis on the pay deal that made Musk eligible for as much as $55.8 billion in stock options based on the company hitting certain milestones. A Delaware judge voided the award earlier this year, pointing to conflicts of interest among Tesla directors and disclosure failures.

Both Tesla shareholder resolutions are currently passing by wide margins!

♥️♥️ Thanks for your support!! ♥️♥️ pic.twitter.com/udf56VGQdo

— Elon Musk (@elonmusk) June 13, 2024

The vote on Musk’s pay carries more symbolic weight than legal power. While shareholders’ approval may help Tesla with an appeal or a rehearing in a new case, the company acknowledged in its proxy filing that it “cannot predict with certainty how a vote to ratify Musk’s compensation would be treated under Delaware law.”

“This doesn’t fully settle the matter; the compensation package can still be deemed illegal,” Piper Sandler analyst Alexander Potter wrote in a note to clients late Wednesday. “We expect the stock to respond favorably to this news, though the upside is perhaps unlikely to be as violent as the downside would have been, had shareholders rejected the deal.”

Tesla Chair Robyn Denholm engaged with large institutional investors on the proposals, and the company placed several ads related to the vote on X. In the final days of the campaign, several engineers and current and former executives posted on the site in support of Musk’s leadership.

Those in favor of re-approving the CEO’s pay included Scottish asset manager Baillie Gifford & Co., Cathie Wood’s Ark Investment Management LLC and Ron Baron, who runs Baron Funds.

Baron, a longtime Tesla investor, said in an open letter that the will of the shareholders who voted in 2018 should be favored. Without Musk, there would “be no Tesla,” and this vote might determine whether he stays at the company, he said.

Those against the proposal included Norway’s sovereign wealth fund, Norges Bank, and California Public Employees’ Retirement System.

Shareholders also voted on Tesla’s proposal to move its state of jurisdiction to Texas. In its proxy filing, the company said it may face legal challenges to redomestication, including from shareholders objecting under Delaware law.

The shareholder meeting will be livestreamed Thursday starting at 4:30 p.m. New York time. 

Latest News

The fight over the CFPB is just beginning
The fight over the CFPB is just beginning

Locked out of their offices and told to stay home, employees at the Consumer Financial Protection Bureau have asked the courts to intervene as Elon Musk and Republican leaders move to shut down the agency that was established to protect people from predatory lending and financial scams.

Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership
Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership

Fintech platform interVal has also introduced a new feature to help advisors support entrepreneurial business owner clients better.

LPL boosts revenue potential with amped-up alts platform
LPL boosts revenue potential with amped-up alts platform

Along with greater revenue, alternative investments also carry risks, one industry lawyer noted.

How SageSpring Wealth Partners' next-gen strategy has fueled its success
How SageSpring Wealth Partners' next-gen strategy has fueled its success

President Jeff Dobyns unpacks the strategic power of mentorship, what makes an "ideal team player," and how the firm's 89 percent success rate has paid off for veteran advisors.

Powell heads for hot-seat hearings with ongoing pressure from Trump policies
Powell heads for hot-seat hearings with ongoing pressure from Trump policies

The Fed chair is in for some "hyper-charged" meetings, with legislators likely to raise questions on tariff threats and apparent steps to comply with anti-DEI orders.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.