Tesla shareholders have reaffirmed more than $45 billion in pay for Chief Executive Elon Musk after being thrown out in a legal challenge.
The vote, which was announced Thursday at Tesla’s annual meeting at its headquarters in Austin, Texas, showed shareholders that Mr. That’s a strong sign of confidence in Musk, and it could persuade the judge who overturned the award to reinstate it.
Support for the remuneration award created by stock options, Mr. A relief to Musk’s fans, who feared the rejection would prompt him to spend less time managing Tesla or even leave.
“We think Elon is critical to Tesla’s success,” said Tasha Keeney, director of investment analysis at ARK Invest. “I think it’s very important to have Elon at the helm.”
The vote drew backlash from investors who hoped it would send a message about the accountability of chief executives and limits on executive pay.
“It’s higher pay than we’ve seen in the U.S. and I don’t think it sets a good precedent,” said Christine Hull, founder and chief investment officer of Nia Impact Capital. its factories.
The richest man in the world worth more than $200 billion The decision could also help qualify Musk.
Addressing shareholders after the vote, he pledged to Tesla. The pay package, he said, “isn’t really cash, I can’t cut and run, I don’t want to.”
Tesla shares on Thursday, ahead of the official announcement of results, said the pay plan was passing by a wide margin, with Mr. X at X.
Kathleen St. J., president of the Court of Chancery in Delaware, where Tesla is incorporated. Tesla’s board called for a vote in response to McCormick’s ruling. In January, CEO McCormick agreed with a group of disgruntled Tesla shareholders who argued in a lawsuit that the 2018 pay package was too high.
Members of the Board Mr. The board hopes the second round of shareholder approval will help address what Chairman McCormick found to be tainted by his 2018 vote in favor of the pay package because he failed to disclose conflicts of interest arising from his personal and financial ties to Musk.
“The legal battle over the compensation plan is still far from over, but we think the vote greatly strengthens Tesla’s case,” Garrett Nelson, an equity analyst at CFRA Research, said in a research note Thursday.
But some legal experts questioned whether a yes vote would make President McCormick reconsider his decision, and Tesla acknowledged that the vote would not settle the case.
With the 2018 Pay Award, Mr. Musk owns 20.5 percent of Tesla and owns less than 13 percent.
Shareholders approved a proposal to move Tesla’s corporate registration to Texas, which Mr. This action has no effect in the Delaware case.
They rejected the proposed move by shareholders, who said Tesla would not interfere with workers trying to organize a union and, if it did, could bargain in good faith. Mr. Musk has often expressed hostility toward organized labor. In Sweden, Tesla has been on strike for nearly six months, refusing to negotiate with the company’s mechanics.
Tesla did not immediately release vote tallies for either project.
With his polarizing statements about the X and the recent decline in Tesla sales and earnings, Mr. Compensation was voted for those who considered Musk.
Robin Denholm, Chairman of the Tesla Group, Mr. He argued that investors became wealthy because of Musk’s leadership and that the company owed him what he promised.
“Elon is not only a visionary, but a CEO with a proven ability to deliver on our mission and achieve incredibly ambitious business results that have created extraordinary value for you,” he said in a letter to shareholders ahead of the vote.
But other shareholders are concerned about the recent decline in Tesla sales and profits and Mr. X at X. Musk has been appalled by polarizing statements where he endorsed some right-wing conspiracy theories and offended a significant number of consumers.
Several large institutional investors voted against the pay package, including Norges Bank Investment Management, which manages Norway’s oil reserves and is the largest sovereign wealth fund. Also opposed was the California Public Employees’ Retirement System, or CALBERS, America’s largest pension fund.
While the broader stock market is up 14 percent, Tesla’s shares are down more than 25 percent this year. At its peak stock price in 2021, Tesla’s stock market value was $1.2 trillion, placing it among tech giants like Microsoft, Apple and Google. Its value has fallen to around $580 billion.
This collection Mr. Musk was granted stock options worth billions of dollars. He achieved revenue or profit benchmarks and increased the company’s stock value to $650 billion.
Most of these goals were deemed unattainable when the plan was approved in 2018. Tesla struggled to produce its first moderately priced Model 3 sedan. Soon, however, Tesla’s business took off, and under the plan, the market cap exceeded the $650 billion target.
To avoid legal challenges, Mr. A pay action requires approval by a majority of voting shares, excluding shares held by Musk or his brother Kimball Musk.
