Tesla is making a second attempt to secure shareholder approval for CEO Elon Musk's eye-popping $56 billion compensation package, following a rejection by a Delaware judge earlier this year. The package, initiated in 2018, hinges on Tesla's market value skyrocketing to $650 billion within the next decade. Musk's pay, which includes no salary or cash bonus, faced criticism from the Delaware Court of Chancery, labeling it "an unfathomable sum" and unfair to shareholders. The rejection nullified what was once hailed as the largest pay package in corporate America.
In response to the court ruling, Tesla is urging shareholders to reconsider the compensation package, emphasizing its belief that the court's decision contradicts established corporate law principles.
Board Chairperson Robyn Denholm expressed disagreement with the court's ruling, arguing that Musk's efforts over the past six years have significantly contributed to Tesla's growth and shareholder value. However, the court's verdict has stalled Musk's compensation, potentially costing him over $10 billion due to Tesla's recent stock decline.
Alongside the compensation package, Tesla is seeking shareholder approval to relocate its corporate domicile from Delaware to Texas. The move aligns with Musk's strategy, as he has already shifted the company's headquarters to Texas. Tesla's regulatory filing emphasizes the need for a shareholder vote on these matters, highlighting the advisory nature of the decision-making process. Despite recent setbacks, Tesla's stock showed a marginal uptick before the market opening, indicating investor interest in the company's future direction.
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