(qlmbusinessnews.com Fri. 14th June, 2024) London, UK —
“Investors Show Confidence as Elon Musk’s Massive Pay Deal Gains Approval”
Elon Musk, the head of Tesla, has announced that shareholders are strongly backing a substantial payout to him and the proposal to relocate the company’s legal headquarters to Texas. The shareholders' votes, which are being counted, show wide margins of support for these proposals.
One of the key proposals under consideration is a pay package for Mr Musk, initially valued at $56 billion (£43.8 billion) when agreed upon in 2018. Tesla is expected to officially announce the voting results during a meeting on Thursday.
Mr Musk expressed his gratitude to supporters on the social media platform X, previously known as Twitter. Tesla shares surged by over 6% following this announcement, which analyst Dan Ives of Wedbush Securities interpreted as a sign of investor confidence that the deal would pass. Ives suggested that the failure of this proposal could have led to Mr Musk's potential departure from Tesla.
Despite the positive vote count, legal experts remain uncertain if the court, which had previously blocked the pay deal, will recognise the re-vote. Earlier this year, a Delaware judge nullified the compensation agreement following a lawsuit from a small investor, ruling it “unfair” and criticising the decision-making process by a board heavily influenced by Mr Musk.
Tesla described the judge’s ruling as “fundamentally unfair” and contradictory to shareholder interests. Consequently, the company resubmitted the deal for another vote and proposed relocating its incorporation from Delaware to Texas.
The Tesla board argues that Mr Musk deserves the compensation for achieving the company’s ambitious goals and that the package is essential to secure his continued commitment to the company. Tesla executives have also voiced their support for the pay deal on social media, emphasising Mr Musk’s vital role in Tesla’s success.
In an effort to engage shareholders, Mr Musk has promised a personal tour of Tesla's Texas factory for some voters. The compensation package, estimated to be 300 times greater than the highest-paid US executive’s salary last year, had previously received support from 73% of voting shareholders six years ago.
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