Tesla shareholders support $56bn pay package, Musk says

13th Jun 2024 09:42

(Sharecast News) - Billionaire Elon Musk has claimed that Tesla Motors shareholders are voting in favour of his controversial $56bn pay package by "a wide margin".

In a post on his social media platform X, formerly Twitter, Tesla's chief executive said investors were backing the package alongside a proposal to move the electric car manufacturer's legal base to Texas from Delaware.

He wrote: "Both Tesla shareholder resolutions are currently passing by wide margins! Thanks for your support!!", alongside four heart emojis.

The Tesla board approved the compensation package - the largest remuneration terms in US corporate history - in 2018. The sum, which does not include a salary, was based solely on rewards for Tesla meeting revenue and market value targets over ten years.

But a court in Delaware invalidated the payout in January, arguing that the board was too close to the billionaire.

The board is appealing and launched the shareholder vote to help bolster its case. The judge had criticised the board's failure to fully inform shareholders before originally approving the package.

Musk has been critical of the state's approach, posting earlier this year: "Never incorporate a company in the state of Delaware."

The shareholder vote results are due to be announced on Thursday. However, most legal experts agree Musk will likely have to wait years before receiving the payout, as the case continues to move through the Delaware legal system.

Although Musk remains popular with retail investors, a number of institutional investors are also expected to vote against the motions. Proxy firms Glass Lewis and Institutional Shareholder Services have also urged shareholders to reject the pay package.

As at 1130 BST, shares in Tesla were up 5% in pre-market trading.

Over the last year, Tesla stock has lost 31% of its value as investors reacted to falling sales as well as concerns about Musk's alleged lack of focus. As well as X, Musk also owns SpaceX and artificial intelligence firm xAI.

The Tesla board has argued that the package would encourage Musk to remain focused on the business. Musk currently owns around 20% of Tesla.