Reference photo. / EFE/EPA/WU HAO
Photo: EFE – WU HAO
Tesla shareholders approved the company’s founder Elon Musk’s gigantic compensation plan, as well as the manufacturer’s change of tax headquarters from Delaware to Texas, according to the results of a vote at its general meeting.
This salary plan, estimated at US$56 billion in 2018 when it was first validated by shareholders, was annulled in January by a Delaware judge. But the company’s board of directors decided, in April, to put it to a vote again at a general meeting this Thursday.
The announcement was made by Brandon Ehrhart, general secretary of Tesla, before hundreds of shareholders gathered in Austin (Texas) who applauded and cheered the result of the vote.
“I adore them,” Musk said on the spot, with a smile on his face.
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The magnate, director and founder of Tesla, had previously assured that the company’s shareholders were supporting his millionaire salary plan by a “wide margin.”
The company campaigned to convince shareholders to approve the initiative again.
“Both Tesla shareholder resolutions are being approved by wide margins,” Musk wrote on his social network X.
“Thank you for your support!!,” the billionaire wrote in his message published Wednesday night.
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Controversial plan
Musk’s compensation plan, approved by his company’s board of directors in 2018 for US$55.8 billion, was annulled in early 2024 by a Delaware court, which ruled on a complaint from an individual shareholder who alleged that the tycoon had dictated its conditions to the council, which was not independent enough.
The agreement provided for Elon Musk to receive Tesla shares based on the achievement of a series of objectives over ten years.
Tesla shares rose more than 7% during the day and closed with a gain of close to 3%.
In an attempt to encourage participation, Tesla announced a sweepstakes of sorts, in which 15 investors would win a tour of Tesla’s plant in Austin, Texas, personally guided by Musk and auto designer Franz von Holzhausen.
Divided waters
Before the official results, Wedbush analysts noted in a note: “Uncork the champagne, for Musk.”
“We think that the massive vote of small shareholders in favor of the two resolutions was crucial for their approval, despite the opposition of some large institutional shareholders,” they added.
Individual shareholders represent around 40% of the company’s stock market capital.
Some analysts and investors were concerned that a possible rejection of the mega pay for Musk would cause him to divert his attention to his other companies, such as SpaceX, X, xAI or Starlink, to the detriment of Tesla.
“Tesla is better with Elon. Tesla is Elon,” said Ron Baron, number one at Baron Funds, who invested about $3 billion in the manufacturer’s shares. “Elon fulfilled his contract. “Elon earned his salary.”
Consulted by AFP, Vanguard, the largest individual investor with 7.23% of Tesla’s capital at the end of 2023, refused to reveal its vote, and the BlackRock fund, the largest in the world and second investor in Tesla, with 5.9% of the Totally, he didn’t respond.
According to The Wall Street Journalthe first voted against the plan in 2018 and the second in favor.
The California Teachers’ Pension Fund (CalSTRS), one of the largest in the United States, voted against a plan described as “ridiculous” by its investment director, Chris Ailman.
Likewise, the Norwegian sovereign fund, NBIM, the largest in the world with 0.98% of Tesla’s share capital at the end of 2023, was also opposed, as in 2018.
Tesla stock was worth $20.70 on Wall Street on the eve of the 2018 shareholder meeting, and is now trading above $177.
