Topline
Tesla shareholders voted to approve billionaire CEO Elon Musk’s roughly $50 billion pay package at the company’s annual shareholder meeting Thursday, as the electric vehicle maker still seeks to appeal a Delaware judge’s decision to void the record-setting deal earlier this year, which for now still holds up the package.
Musk’s award is roughly valued at $50 billion. (Photo by Frederic J. BROWN / AFP)
AFP via Getty Images
Key Facts
The vote will likely be used as part of the company’s challenge against Delaware Court of Chancery Judge Kathaleen McCormick, who has characterized Musk’s award as “unfathomable.”
Shareholders also approved Tesla’s redomestication from Delaware to Texas, a transition Musk pushed for after his compensation deal was voided by McCormick in January, when he tweeted, “Never incorporate your company in the state of Delaware.”
Musk’s award provides the world’s richest man with stock options linked to performance milestones and varies based on Tesla’s stock price, which is down nearly 27% since the start of the year.
Musk’s brother, Kimbal Musk, and James Murdoch, the son of billionaire media mogul Rupert Murdoch, were reelected to Tesla’s board of directors.
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Tangent
Tesla’s stock jumped as high as $190 per share Thursday before cooling down to $182.47 at close.
Forbes Valuation
We estimate Musk’s net worth at $212.8 billion following a 1.4% increase Thursday.
Surprising Fact
When Musk was asked about his well-being at the shareholder conference, the Tesla chief told shareholders, “We actually did have two homicidal maniacs in the last roughly seven months come to aspirationally try to kill me and a bunch of other people.” He noted he has stopped signing items out of fear for his safety. “I have to be more standoffish and stuff, which I prefer not to be but it seems wise.”
Key Background
The shareholder vote does not change the dispute of Musk’s pay package in Delaware. McCormick has scrutinized the close relationship between Musk and Tesla’s board and said the company has not protected shareholder interests. Tesla must wait for a final ruling on Musk’s award, which has been delayed over concerns of how legal fees will be paid, before it can appeal McCormick’s decision. Columbia University law professor Zohar Goshen told Forbes a failed appeal from Tesla could be addressed by the company proposing a lesser-valued replacement award for Musk to shareholders. The compensation package approved Thursday would increase Musk’s Tesla equity from 13% to 22%. The billionaire has said he would need 25% equity to develop artificial intelligence at Tesla.
Further Reading
Even If Musk Gets Votes, He Won’t See $50 Billion For Long Time (Forbes)
Here’s What’s Next After Musk Claims Tesla Shareholders Approve Massive Pay Package (Forbes)
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