Tesla shareholders vote to reinstate Elon Musk’s $56 billion pay package

Tesla shareholders on Thursday voted to ratify CEO Elon Musk’s mammoth 2018 pay plan, five months after a judge in Delaware ordered the company to rescind the package, finding it had been improperly granted by the board.

At Tesla’s annual meeting in Austin, Texas, the vote in support of the compensation plan, doesn’t override the court’s ruling, but provides a public relations victory for Musk and could help his effort to sway a court to give him his performance options in the future.

Taking the stage after the preliminary results were announced, Musk said, “I just want to start off by saying hot d—! I love you guys.”

Watch Elon Musk speak at the Tesla shareholder meeting now

The compensation package was previously worth as much as $56 billion in Tesla stock. In January, a Delaware court called the pay “unfathomable.” Judge Kathaleen McCormick found that Tesla’s board members lacked independence from Musk, failed to properly negotiate at arm’s length with the CEO and didn’t to give shareholders the full picture before asking them to vote on his pay plan.

Tesla shares rose 2.9% in regular trading on Thursday to close at $182.47 after Musk posted on X that the proposal was set to be approved. The stock is still down 27% for the year, as Tesla reckons with declining sales tied to an aging lineup of electric vehicles and increased competition in China.

The annual meeting featured final votes on a dozen proxy proposals, including an effort by Musk to move Tesla’s site of incorporation out of Delaware, where most large publicly traded companies are incorporated, and into Texas, home to the automaker’s largest U.S. factory. Shareholders voted in favor of the move.

At the last shareholder meeting, in May 2023, Musk predicted the economy would pick up after 12 months, said that Tesla would deliver production Cybertrucks in late 2023, and informed investors that Tesla would “try out a little advertising” and see how it goes.

Recent inflation and jobs numbers point to some improvement. Tesla held a Cybertruck deliveries event in late 2023, and has been advertising over the past year, including on X, the social media company formerly known as Twitter that Musk acquired for $44 billion in late 2022.

However, during last year’s meeting, Musk promised shareholders he would spend less time on the app going forward, calling the business a “short-term distraction.”

He’s still spending plenty of time on other things. Musk is CEO of SpaceX and brain computer interface company Neuralink. Last year he also started a new company called xAI, which has raised billions of dollars to developing large language models and an AI chatbot called Grok that uses data and data center capacity from X.

An exuberant Musk, calling himself “pathologically optimistic,” promised Tesla shareholders at the meeting that the company is making such great progress on developing “vehicle autonomy,” or systems to turn existing Tesla cars into self-driving vehicles, that he believes they can “10x the value of the company.”

While Musk has been promising that level of autonomous technology since 2016, it’s yet to deliver. Meanwhile, competitors including Pony.ai, Didi and Waymo have developed robotaxis and already operate commercial services.

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