Tesla shareholders on Thursday voted to approve Elon Musk’s stunning novel pay package, a move aimed at maintaining the controversial CEO’s leadership at a time of great upheaval for the automaker. Over 75% voted in favor of this proposal. votes.
The vote gives Musk enormous power over his electric vehicle company and also awards him the largest corporate payout in history. The final result is expected to be disclosed in a Securities and Exchange Commission filing within days.
Musk took the stage at a shareholder meeting in Austin, chanting “Elon! Elon!” and dancing Optimus robots on the sides. “We are about to start not only a new chapter in Tesla’s future, but a completely new book,” he said.
The vote was opposed by some of Tesla’s largest shareholders, including Norges Bank Investment Management, which runs Norway’s sovereign wealth fund, as well as some smaller public pension funds such as the American Federation of Teachers and various Up-to-date York City pension systems. Major proxy advisory firms Institutional Shareholder Services and Glass Lewis also opposed the compensation proposal.
Musk’s current compensation package, valued at more than $50 billion, was invalidated by a Delaware court last year after a judge found that Tesla’s board did not have enough independence from the billionaire CEO. Shareholders voted twice to approve the high compensation, but the judge upheld her ruling anyway, blocking it. Tesla appealed this decision to the Delaware Supreme Court. That ruling prompted Musk to develop a proposal to move Tesla’s legal home from Delaware to Texas, which shareholders also agreed to.
The novel award comes as management continues to spread the message that Tesla is on the brink of becoming a leader in artificial intelligence and robotics, which requires Musk’s steady hand at the helm. In fact, Tesla’s position is more precarious than ever. Musk’s support for President Donald Trump and his work at the Department of Government Efficiency to lay off tens of thousands of federal workers and cancel humanitarian aid programs has resulted in a nationwide protest movement and a acute decline in sales. The expiration of the federal tax credit for electric vehicles is expected to lead to an even greater decline in sales.
Whether Musk can achieve these bold goals outlined in his compensation package appears increasingly at odds with his approach to technology. Tesla launched its first robotaxi service in Austin, Texas, earlier this year – although the service fell tiny of Musk’s earlier predictions. All cars still have safety monitors in both the driver and passenger seats, although Musk has said they could be removed by the end of the year. The company’s only novel product from 2020, Cybertruck, is widely considered a consumer failure. And competition from other automakers, especially those in China, is eroding Tesla’s market share and depleting its resources.