Elon Musk may be getting his record-setting pay package after all.
Tesla is asking its shareholders to vote on the CEO’s $47 billion compensation plan at its annual meeting on June 13, The New York Times reported on Wednesday. Notably, the same package was voided by a Delaware judge back in January, in part because shareholders didn’t have all the necessary information when they voted to approve the plan back in 2018, she ruled. Now, though, with those details having come to light, Tesla is asking for a redo.
“We suggest simply subjecting the original 2018 package to a new shareholder vote, accompanied by expansive disclosure as to the process undertaken and the potential conflicts of interest that were considered at the time,” the company said in a special board committee report, according to the Times.
The pay package—which would be the richest in U.S. corporate history, the publication noted—was originally approved by about 73 percent of non-Musk Tesla shareholders. It gives the founder the right to buy up to 304 million shares at $23.34 each. However, that compensation was tied to Musk reaching impressive financial markers—which he did. A group of shareholders sued to block the payouts, and the judge agreed with their reasoning.
Tesla is in the process of appealing that decision, the Times wrote, and in the meantime it would like to reinstate a vote on the pay package. The same committee that wrote the report said four of Tesla’s 10 largest institutional shareholders had asked for the revote, hinting that they would once again support the package. And the company’s board has said it’s gotten messages from thousands of shareholders who have supported the plan in the wake of the Delaware ruling.
“Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and shareholder value,” Robyn Denholm, the chair of Tesla, said in a letter to shareholders cited by The New York Times. “That strikes us—and the many stockholders from whom we already have heard—as fundamentally unfair, and inconsistent with the will of stockholders who voted for it.”
Of course, the shareholders who brought the original suit will likely vote against the plan. And their lawyers could try to influence other stockholders to do the same, the Times noted. Yet others may vote against Musk due to their displeasure with his public outbursts on X or because voiding the plan would save the company billions of dollars.
With the new vote upcoming, everyone will get to voice their opinion.
Authors
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Tori Latham
