Tesla shareholders voted Thursday to approve Elon Musk’s staggering new pay package, 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 automobile firm, in addition to awards him with the biggest company payout in historical past. The ultimate tally is anticipated to be disclosed in a Securities and Trade Fee submitting in just a few days.
The proposed pay bundle, which was put forward by the board last September, would award Musk greater than 423 million further shares, growing his stake to about 25 % from its present stage of 15 %. As a way 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 vehicles, 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 Academics and numerous New York Metropolis retirement techniques. Main proxy advisory companies Institutional Shareholder Providers and Glass Lewis have additionally come out in opposition to the pay proposal.
Musk’s present compensation bundle, valued at greater than $50 billion, was invalidated by a Delaware court docket final 12 months after a choose discovered that Tesla’s board lacked ample independence from the billionaire CEO. Shareholders had voted twice to approve the hefty compensation, however the choose nonetheless upheld her ruling blocking it. Tesla has appealed the decision to the Delaware Supreme Court docket. The ruling spurred Musk to engineer a proposal to maneuver Tesla’s authorized house 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 changing into a pacesetter 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 employees and cancel humanitarian help packages spawned a nationwide protest motion and a steep drop in sales. The expiration of the federal EV tax credit score is anticipated to result in a fair additional drop in gross sales.
Whether or not Musk can obtain these audacious objectives set out within the pay bundle appears more and more at odds together with his method to the know-how. Tesla rolled out its first robotaxi service in Austin, Texas, earlier this 12 months — though the service fell short of Musk’s earlier predictions. The vehicles nonetheless all characteristic security screens, both within the driver or passenger seat — although Musk has mentioned they might be removed by the end of the year. The corporate’s solely new product since 2020, the Cybertruck, has broadly been thought-about a consumer flop. And competitors from different automakers, particularly these in China, has been shrinking Tesla’s market share and sapping its assets.