Elon Musk claims victory over his $56 billion payout brought home with the approval of Tesla shareholders. At the end of a long back and forth, the South African tycoon is right to rejoice: the shareholders of his car company have voted in favor of the monstrous remuneration package for the CEO. The multibillionaire anticipated the outcome of the vote while it was underway on Thursday 13 June, despite having some of the biggest investors against him.
Elon Musk's huge salary
Musk appealed to the many small shareholders to circumvent the opposition of several of the largest shareholders of Tesla, such as the Norwegian sovereign fund “Norges Bank”, the largest pension fund in the United States, that of public employees of California “Calpers” and the California State Teachers Retirement System (Calstrs).
As recalled by Corriere della Serato get the “yes” of the majority of voters, the CEO and founder of Tesla had leveraged the threat of his possible farewell to the company or slow down its developmentwarning that he doesn't feel “comfortable” introducing artificial intelligence into cars without having control of the company.
Reason why the owner of the company had asked that he be granted a package that could bring him to a share of at least 25%, in order to allow him to continue the integration of AI on the car manufacturer's vehicles.
In a letter to shareholders, the president of Tesla, Robyn Denholm, explained that the maxi prize, composed mainly of a share assignment plan over the course of a decade, serves “to keep Elon's attention and to motivate him to focus on achieving amazing growth for our company.”
“Both Tesla shareholder resolutions are passing with wide margins!“, wrote Musk on his profile 'X' while the vote was still underway, showing the trend of preferences, in reference to the resolutions to approve his $ 56 billion compensation package and the plan to move Tesla's headquarters from Delaware to Texas.
The story
The need to appeal to the shareholders' opinion arose from the annulment of the maxi remuneration package established in 2018 by the Delaware court, according to which the compensation figure would be disproportionate, contrary to the interest of investors and approved by a board of directors dominated by Musk. Hence the decision of the founder of Tesla to call the shareholders' meeting to express its opinion with a second vote.
The South African multi-billionaire, already at the top of the list of the richest in the world, however, he will not receive the prize in the form of moneybut in options which, once exercised, will allow him to increase his stake in Tesla by 25%, which currently stands at 13%.
The final amount could be higher or lower than the current indicative value of 56 billion, depending on the company's stock market prices, which currently capitalizes on Wall Street at around 550 billion dollars on Wall Street, a sum of 30% lower compared to a year ago and halved compared to the highs of 1,120 billion reached in November 2021.
After Elon Musk's announcement that he had obtained the necessary votes for his monstrous salary, Tesla shares rose by 7.63%.
Despite the victory on the shareholder front, the final decision remains in the hands of the Delaware courts: if the judge also gives the green light, Musk will be able to exercise the options immediately or defer them over time until 2028.
