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 predicted to be disclosed in a Securities and Change Fee submitting in a number 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, growing his stake to about 25 % from its present stage of 15 %. With a view to obtain the complete compensation, Musk would want to realize a sequence 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 automobiles, 10 million Full Self-Driving subscriptions, and 1 million humanoid robots.
Musk would want to realize a sequence 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 methods. Main proxy advisory companies Institutional Shareholder Providers 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 court docket final yr after a decide discovered that Tesla’s board lacked ample independence from the billionaire CEO. Shareholders had voted twice to approve the hefty compensation, however the decide nonetheless upheld her ruling blocking it. Tesla has appealed the choice to the Delaware Supreme Courtroom. The ruling spurred Musk to engineer a proposal to maneuver Tesla’s authorized residence from Delaware to Texas, which shareholders additionally accepted.
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 assist for President Donald Trump and his work on the Division of Authorities Effectivity to fireside 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 predicted to result in an excellent 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 along with his strategy to the expertise. Tesla rolled out its first robotaxi service in Austin, Texas, earlier this yr — though the service fell wanting Musk’s earlier predictions. The automobiles nonetheless all function security displays, both within the driver or passenger seat — although Musk has stated they might be eliminated by the tip of the yr. The corporate’s solely new product since 2020, the Cybertruck, has broadly been thought of a client flop. And competitors from different automakers, particularly these in China, has been shrinking Tesla’s market share and sapping its sources.