The shareholders of Tesla have approved a gigantic remuneration package worth 56 billion dollars for CEO Elon Musk. The share package, which was approved back in 2018, received a broad majority at the Annual General Meeting. This was despite opposition from some large institutional investors and an earlier court ruling that declared the package invalid.
Largest CEO remuneration package in US history
The remuneration package, which has now been re-approved by shareholders, is considered the largest in US history. It underlines the esteem in which Musk is held by shareholders. The package had been declared invalid by a court in Delaware because Musk had too much influence in the background when agreeing the plan, which led to an unfair process. The shareholders' approval despite this decision shows their confidence in Musk's leadership.
Conditions and performance
The remuneration package is linked to specific company targets. Musk has the right to receive around 300 million Tesla-shares at a price of 2018, provided that Tesla certain targets are achieved over a period of up to ten years. These include an increase in the stock market value from a good 50 billion dollars to 650 billion dollars. Thanks to the rapid growth and euphoria surrounding electric cars Tesla quickly reached this mark and was even worth more than a trillion dollars at times, increasing Musk's package to around 100 billion dollars. Currently Tesla valued at around 580 billion dollars.
Reactions and controversies
Musk expressed his gratitude on the social media platform X with the words: "Thank you for your support!" The governor of Texas congratulated Musk and emphasized the tax advantages of the state in which Tesla now wants to relocate its official company headquarters. This decision was also approved by the shareholders at the Annual General Meeting.
Both Tesla shareholder resolutions are currently passing by wide margins!
- Elon Musk (@elonmusk) June 13, 2024
♥️♥️ Thanks for your support! ♥️♥️ pic.twitter.com/udf56VGQdo
Not everyone was thrilled with Musk's response. Brad Lander, an accounting expert for the City of New York, criticized Musk's hasty tweet as another sign of the company management's failure to Tesla. Some shareholders accused Musk of "shameless disloyalty" and sharply criticized his "pay up or leave" ultimatum.
Musk's influence on the vote
Tesla had campaigned heavily for a "yes" vote in the run-up to the vote. Executives published posts on X in which they emphasized that Musk was crucial to the success of Tesla success. Ads were placed on social media and factory tours were organized for investors to gain support.
Conclusion: A vote of confidence in Elon Musk
The approval of Musk's controversial remuneration package and the move to Texas shows the continued confidence of investors in Elon Musk's vision and leadership. Despite the controversies and legal hurdles, Musk remains a central player in Tesla, whose presence many shareholders consider irreplaceable.
