Under the leadership of CEO Elon Musk, Tesla is credited with revolutionizing the auto industry, ushering in the electric revolution and amassing billions in profits in the process. Now Musk is set to receive a record payout worth about $50 billion after shareholders of the electric car company approved a pay plan that was previously blocked by a federal judge.
The preliminary vote result was announced Thursday afternoon during the annual shareholder meeting at Tesla’s newest car and battery plant in Austin, Texas.
The setup was right: Shareholders also approved a measure to transfer Tesla’s corporate registration from Delaware to Texas. The company’s board argued that the Delaware court system – where a judge struck down Musk’s compensation system in January – was unfair to Tesla.
“Damn, I love you guys,” an ebullient Musk told shareholders from the stage at a meeting in Austin after announcing his agreement to the pay package.
The vote was a referendum on Musk’s leadership at Tesla, as some shareholders argued that the CEO had become more visibly distracted in his dealings with other companies, including SpaceX, tunneling company The Dull Company, social networking site xAI artificial intelligence. The electric car company has also lost more than half its value since its peak at the end of 2021, when it was worth about $1.24 trillion. Lower car sales, increased competition in the electric car market and a shift toward robotics and autonomous vehicle technology have left some shareholders confused about Tesla’s future.
In a letter published before the vote, an attorney advising Glass Lewis said he said there was concern that the pay package would give Musk too much power over Tesla, making him the company’s largest shareholder “by a significant margin.”
But supporters of the package – who won Thursday’s vote – said the pay was fair compensation for Musk’s performance at Tesla. “If Tesla is to keep Elon’s attention and motivate him to continue to devote his time, energy, ambition and vision to ensure comparable performance in the future, we must honor our agreement,” board chairwoman Robyn Denholm said in a statement. letter to shareholders before the vote.
Now Musk will have even more control over his electric car company. Time will tell what he will do with this power.