Tesla shareholders voted Thursday to approve Elon Musk’s staggering new pay package deal, in a transfer geared toward retaining the controversial CEO’s management throughout a time of nice upheaval for the automaker. Over 75 % of shares voted in favor of the proposal.
The vote provides Musk monumental sway over his electrical car firm, in addition to awards him with the most important company payout in historical past. The ultimate tally is anticipated to be disclosed in a Securities and Alternate Fee submitting in a couple of days.
The proposed pay package deal, which was put ahead by the board final September, would award Musk greater than 423 million extra shares, rising his stake to about 25 % from its present stage of 15 %. With the intention to obtain the total compensation, Musk would want to attain a collection of milestones, together with elevating Tesla’s market capitalization from its present $1.5 trillion to $8.5 trillion in 10 years. Musk should additionally put into service 1 million robotaxis and promote 12 million extra vehicles, 10 million Full Self-Driving subscriptions, and 1 million humanoid robots.
Musk would want to attain a collection of milestones, together with elevating Tesla’s market capitalization from its present $1.5 trillion to $8.5 trillion in 10 years.
The vote was opposed by a few of Tesla’s largest shareholders, together with Norges Financial institution Funding Administration, which manages Norway’s sovereign wealth fund, in addition to some smaller public pension funds, such because the American Federation of Lecturers and numerous New York Metropolis retirement programs. Main proxy advisory corporations Institutional Shareholder Companies and Glass Lewis have additionally come out in opposition to the pay proposal.
Musk’s present compensation package deal, valued at greater than $50 billion, was invalidated by a Delaware courtroom final 12 months after a choose discovered that Tesla’s board lacked ample independence from the billionaire CEO. Shareholders had voted twice to approve the hefty compensation, however the choose nonetheless upheld her ruling blocking it. Tesla has appealed the choice to the Delaware Supreme Court docket. The ruling spurred Musk to engineer a proposal to maneuver Tesla’s authorized residence from Delaware to Texas, which shareholders additionally accredited.
The brand new award comes because the board continues to push the message that Tesla is on the cusp of turning into a frontrunner in AI and robotics, requiring Musk’s regular hand on the helm. In actuality, Tesla’s place is shakier than ever. Musk’s help for President Donald Trump and his work on the Division of Authorities Effectivity to fireplace tens of 1000’s of federal staff and cancel humanitarian assist applications spawned a nationwide protest motion and a steep drop in gross sales. The expiration of the federal EV tax credit score is anticipated to result in a fair additional drop in gross sales.
Whether or not Musk can obtain these audacious objectives set out within the pay package deal appears more and more at odds together with his method to the know-how. Tesla rolled out its first robotaxi service in Austin, Texas, earlier this 12 months — though the service fell in need of Musk’s earlier predictions. The vehicles nonetheless all characteristic security displays, both within the driver or passenger seat — although Musk has mentioned they could possibly be eliminated by the top of the 12 months. The corporate’s solely new product since 2020, the Cybertruck, has broadly been thought-about a shopper flop. And competitors from different automakers, particularly these in China, has been shrinking Tesla’s market share and sapping its assets.