Elon Musk has said Tesla’s shareholders have backed his historic $56bn (£44bn) pay deal in a significant win for the billionaire.
Mr Musk tweeted that preliminary results of investor voting on his huge pay package and whether to move Tesla’s headquarters to Texas showed both were passing by “wide margins”.
Voting closed late last night.
Approval for the Tesla chief’s huge pay deal – the biggest in history – would be a significant win for Mr Musk and the company.
The incentive package was originally passed in 2018 but was struck down in January by a judge in Delaware, who said investors weren’t fully informed of key details.
Kathaleen McCormick, court judge, said the package did not meet the standard of a “fair price”, calling its size “unfathomable”.
Under the plan, Mr Musk is eligible for as much as $55.8bn in stock options if Tesla hits certain milestones, which the company has reached.
The row over the pay deal motivated Mr Musk to seek to shift Tesla’s headquarters to Texas, where he hoped to revive the package.
Shareholder approval is seen as a crucial step in challenging the Delaware ruling.
Alexander Potter, an analyst with Piper Sandler, said: “This doesn’t fully settle the matter; the compensation package can still be deemed illegal.
“But a Delaware judge previously struck down the package citing limited shareholder disclosure, and given enhanced disclosures preceding this vote it’s unclear why anyone would take issue with this newly ratified deal.”
Mr Musk and Tesla’s board have been intensely lobbying shareholders to back the package in recent weeks, but approval was not guaranteed.
Norway’s sovereign wealth fund, which is Tesla’s eighth biggest shareholder, said last weekend it would be voting against the deal.
Supporters of the deal include Scottish investment giant Baillie Gifford and Ron Baron, a long-time Tesla investor, who said in an open letter that there would “be no Tesla” without Mr Musk.
The Tesla chief had threatened to leave the company if investors did not back his $56bn award.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
