Tesla: Shareholders approve the payment of US$56 billion to Elon Musk that stopped justice

Tesla shareholders backed a record pay package for boss Elon Musk and approved a plan to move the company’s legal headquarters to Texas. The results are a victory for the billionaire, who campaigned intensely in favor of the payment, which can reach up to US$56 billion.

The final amount will depend on the electric car company’s stock price.

Such a sum had caused concern and criticism from those who believe that the company’s board of directors is too submissive and close to Musk.

Earlier this year, a Delaware judge accepted the arguments of a small shareholder who sued over the deal and ordered a suspension of compensation payments.

The dispute over the plan raised doubts about Musk’s leadershipat a time when the company’s share price has fallen from its highest price and its dominant position in the electric car industry is in question due to the emergence of new competitors and public preferences.

But Musk rallied his loyalists behind the deal, appealing particularly to individual investors, who make up an unusually large portion of the company’s shareholder base.

“Gee, I love you guys,” Musk told a crowd of enthusiastic shareholders who gathered in Texas for the company’s annual meeting.

The company did not immediately disclose the margin of the vote, but Musk announced the results in a post on his social network X, formerly known as Twitter.

The company’s shares closed up nearly 3% after Musk’s announcement.

Analyst Dan Ives of Wedbush Securities said that The rise shows investor confidence that the deal was going to be finalized and fears that Musk could seek an exit route from the company have evaporated..

“If this proposal failed, many negative scenarios could have occurred, including Musk embarking on a path to no longer be the CEO of Tesla,” Ives wrote in a note.

The compensation plan gives Musk rights to about 300 million shares, roughly a 10% stake in the company, as a reward for the firm achieving goals once considered unattainable, such as being valued at $650 billion.

However, legal experts have pointed out that the court that blocked the agreement may not accept the result of the new vote and stop the payment package again.

In her ruling earlier this year, Judge Kathaleen McCormick ruled that the sum was “unfair” and the process for determining the package, approved by a board dominated by Musk, “deeply flawed.”

Tesla described the judge’s decision “fundamentally unfair and contrary to the will of the shareholders”.

The company then put the deal to another vote and asked its shareholders to back a plan to move the company out of the state of Delaware.

The board said Musk deserves the package because, under his leadership, Tesla achieved its most ambitious goals, and noted that it is also necessary to ensure that he remains dedicated to the direction of the company.

Senior Tesla executives also expressed support for the package in social media posts in which they portrayed it as crucial to the company’s success.

Musk promised a personal tour of Tesla’s factory in Texas to some of the shareholders who cast votes.

The package reaches an estimated value of 300 times what the highest paid manager in the US earned. last year.

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