Tesla shareholders called to reaffirm Elon Musk’s executive compensation

Something promised, something worthwhile. Ever since a Delaware judge’s decision denied him a nearly $56 billion jackpot, Elon Musk has continued to promise to move Tesla’s headquarters to Texas. In a letter published this Wednesday, the chairman of the board of directors of the car maker, Robyn Denholm, asked the car company’s shareholders to approve this proposal… and also to approve a big compensation plan for its billionaires. the boss.

“We disagree with the Delaware court’s decision and do not believe its decision is consistent with how corporate law should work,” he wrote. So we request you to help us to solve this issue. »

47.8 billion dollars

On January 31, Judge Kathaleen McCormick ruled in favor of a Tesla shareholder who opposed Elon Musk’s stock compensation plan voted in 2018 at the general meeting. For him, the vote had been tainted in advance by “bad” and “misleading” information, justifying its cancellation.

Furious, the billionaire, who owns 13% of the company’s shares, has since continued to condemn Delaware, which is home to 70% of Wall Street’s listed groups, for its favorable tax system. True to form, he started by organizing a plebiscite vote – 87% “for” – on his social network X to confirm with the general public the prospect of moving Tesla’s headquarters. He went on to move the registration of his other main company SpaceX (not listed) from Delaware to Texas.

In the event of a favorable vote during the general meeting on June 13, he could do the same with Tesla and be given a compensation plan estimated at $47.8 billion, at the current stock price.

“Persuade Elon Musk to stay at Tesla”

Through the pen of Robyn Denholm, the board of directors strongly recommended that the general meeting decide in this direction. “Elon has not been paid for any of his work at Tesla for the past six years, even though he has contributed significantly to the growth” of the company, said the manager. He also called to convince Elon Musk “not only to stay at Tesla (…) but also to continue to bring the same level of commitment to the company”.

The businessman recently threatened to look elsewhere if he didn’t get enough power for the head of the manufacturer. In mid-January, he announced on X that he wanted to get about 25% of the voting rights on the board of directors, otherwise he could choose another basis for his projects in artificial intelligence and robotics.

Compared to its competitors and the slowdown in the growth of electric car sales, Tesla is going through a difficult period marked by a decline in its sales and a share price that has been reduced by a third since the beginning of the year, and it has just announced its withdrawal. of 10% of its global workforce. The departure of its logo boss would worsen the situation. Musk is in a position of power, and he knows it.