Musk applauds ‘wide margin’ of support for Tesla’s record $56 billion pay package | Business News

Elon Musk has claimed a “wide margin” of support among Tesla shareholders for a $56 billion payment package he was owed but blocked by a court.

A new shareholder vote was ordered after a judge in Delaware ruled in January that the 2018 awards were effectively controlled by the billionaire, as the board had close personal and financial ties to Tesla’s founder and chief executive.

The $56 billion (£43.4 billion) figure – the highest bonus ever seen in corporate America – does not consist of salaries or bonuses.

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The sum arises purely from rewards for Tesla achieving revenue and market value targets over 10 years.

Tesla said investors were given full disclosure, including the court’s ruling, ahead of the new salary vote.

If it passes, how Musk believes so, then the matter goes back to court for ratification.

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Legal experts said the process is unprecedented and could take months – complicated by potential challenges to the outcome of the shareholder vote.

In addition to the salary issue, Tesla is asking investors to approve moving its headquarters from Delaware to Texas.

At the time of the Delaware court ruling, Musk had written on the X: “Never incorporate a company in the state of Delaware.”

“Thank you for your support!!” Musk said in a new post aimed at Tesla investors Wednesday morning.

Texas Governor Greg Abbott responded, “Welcome to a state that charges neither personal nor corporate income taxes.”

The results are expected to be released on Thursday night.

Although Musk is confident of winning, there has been opposition.

Leading proxy firms Glass Lewis and Institutional Shareholder Services urged shareholders to reject the pay package.

Major investors who declared opposition included Norway’s sovereign wealth fund.

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Their concerns, which undoubtedly include the sum of $56 billion, will likely extend to the stock’s performance since its 2021 peak.

Tesla shares have lost almost 60% of their value since then.

Then Musk began selling billions of dollars of his Tesla stake, in part to help finance his purchase of Twitter, which he renamed X.

More recently, the stock has suffered due to falling sales. Other concerns include pressure on his time, as his broader interests also include SpaceX and artificial intelligence company xAI.

Tesla’s board argued that Musk deserves the package because he met all the ambitious market value, revenue and profitability targets set at the time.

He also said a positive vote would help convince Musk to remain devoted to Tesla.

Columbia Law School professor Zohar Goshen told the Reuters news agency that he thought the Delaware court’s decision should be reversed.

He said: “It is difficult to estimate how the court will rule because there is a lot of noise surrounding this decision. But my personal opinion is that Tesla should succeed.”