It looks as though Tesla shareholders are backing CEO Elon Musk’s push for the highest pay package in U.S. corporate history.
One day before any official announcement from Tesla, Musk shared that the resolution to approve his pay package, worth as much as $56 billion, and the resolution to move Tesla’s legal home from Delaware to Texas were both “passing by wide margins.”
Musk posted graphs showing that both issues had obtained more votes than needed for a “guaranteed win.”
Tesla stock surged after the news.
Both Tesla shareholder resolutions are currently passing by wide margins!
♥️♥️ Thanks for your support!! ♥️♥️ pic.twitter.com/udf56VGQdo
— Elon Musk (@elonmusk) June 13, 2024
Shareholders are voting on the pay package they first approved in 2018, which a Delaware judge overturned earlier this year and called “an unfathomable sum.”
Related: Tesla to Shareholders: Approve CEO Musk’s Record-High Pay
The legalities of Musk’s pay package are uncertain even if shareholders approve it again and Tesla moves its legal home from Delaware to Texas.
“Even if the shareholders do approve the old package, it is not clear that the Delaware court will allow that vote to be effective,” UC Berkeley law professor Adam Badawi told Reuters.
Musk’s pay package would place him leaps and bounds ahead of even the highest-paid CEOs in the U.S. According to a June study from AP, the current highest earner is Broadcom’s Hock E. Tan with an overall compensation of $162 million. Apple’s Tim Cook makes about $63 million, per the same list.
Tesla CEO Elon Musk. Photo by FREDERIC J. BROWN/AFP via Getty Images
A Wednesday statement from CalPERS, which owns 9.2 million Tesla shares as of June 7, points out that the proposed pay package is almost 140 times higher than the annual pay of other high-performing CEOs.
Musk’s compensation would be “excessive” compared to his peers and “highly dilutive” from a shareholder perspective, CalPERS CEO Marcie Frost stated.
CalPERS also highlighted that the pay package is more than Tesla’s net income of $33.8 billion in the past four years (2020 to 2023).
Related: These CEOs Have the Biggest Pay Packages in the U.S., According to a New Report
Still, for the shareholders who voted in favor of the pay package, it may not be about the money.
Tesla’s chairperson of the board of directors Robyn Denholm wrote in a letter to shareholders last week that Musk’s pay package is “obviously not about the money” and actually about “retaining Elon’s attention and motivating him.”
The letter caused concern ahead of the meeting that Musk could leave Tesla if his compensation was not approved.
Related: Elon Musk’s Proposed $56 Billion Pay Package Is ‘Obviously Not About the Money,’ Writes Tesla Chair
The vote closes at 5:30 p.m. ET on Thursday and final tallies will officially be announced at Tesla’s annual shareholder meeting, which starts on Thursday at 4:30 pm ET.
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