Tesla asks shareholders to help Elon Musk get paid $56 billion

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Tesla's latest move to seek shareholder approval for CEO Elon Musk's $56 billion compensation package is setting the stage for a high-stakes showdown after a recent setback in court. The Delaware Chancery Court's ruling earlier this year questioned the fairness of Musk's massive pay deal, prompting Tesla to appeal directly to its shareholders.

 

In its proxy statement filed with the Securities and Exchange Commission on Wednesday, Tesla outlined its request for shareholder endorsement of Musk's pay package. This comes amidst a challenging period for the electric vehicle (EV) giant, as concerns mount over the demand for EVs, leading to a decline in Tesla's stock value.

 

The annual meeting scheduled for June 13 will be a crucial moment for Tesla and its shareholders, who will have the opportunity to weigh in on Musk's compensation as well as the company's proposed relocation of its state of incorporation from Delaware to Texas. The latter move aligns with Tesla's shift of its corporate headquarters to Texas, a decision Musk believes will be advantageous for the company.

 

This latest development follows the initial approval of Musk's pay package by shareholders back in 2018. However, the recent ruling by Chancellor Kathaleen McCormick cast doubts on the fairness of the compensation deal, citing Musk's undue influence in the negotiation process.

 

Tesla has vigorously defended the legitimacy of Musk's compensation, asserting that it was formulated transparently and in the best interests of the company. Robyn Denholm, Tesla's chair, lamented the court's intervention in the board's decision-making process, arguing that it undermines the will of the shareholders who initially approved the pay package.

 

Denholm praised Musk for his leadership and credited him with driving Tesla's growth and delivering value to shareholders. She reaffirmed the board's support for the original compensation agreement, emphasizing Musk's contributions to Tesla's success.

 

The outcome of the shareholder vote will be closely watched, with analysts speculating that the 2018 pay package could be reapproved, rendering the Delaware court's ruling moot. Nevertheless, the issue remains contentious among some investors, underscoring the importance of transparency and accountability in corporate governance. As Tesla navigates this critical juncture, its ability to secure shareholder approval will shape the trajectory of Musk's compensation and the company's future direction.

 

2024-04-19

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[RuamRudy]

I don't think that any single person could explain adequately just why one individual is worth so much to any company - if Musk was hit by a bus tomorrow, the share price may take a blip but Tesla would continue on its trajectory without him. 

 

This push towards the normalisation of corporate greed, in fact the lionising of it to make it appear as something to be admired and aspired towards, is seemingly relentless as world leaders sit quietly by. 

 

Yesterday Tesla started to reduce its workforce with a plan to make 14,000 people redundant to cut costs; today they want to give $56 billion to one man. These are not the actions of a board looking to deliver long term value to shareholders - unless this is a dead cat to distract from how badly they have handled the lay-offs.

[thaibeachlovers]

2 hours ago, RuamRudy said:

I don't think that any single person could explain adequately just why one individual is worth so much to any company - if Musk was hit by a bus tomorrow, the share price may take a blip but Tesla would continue on its trajectory without him. 

 

This push towards the normalisation of corporate greed, in fact the lionising of it to make it appear as something to be admired and aspired towards, is seemingly relentless as world leaders sit quietly by. 

 

Yesterday Tesla started to reduce its workforce with a plan to make 14,000 people redundant to cut costs; today they want to give $56 billion to one man. These are not the actions of a board looking to deliver long term value to shareholders - unless this is a dead cat to distract from how badly they have handled the lay-offs.

I don't often agree with anything you say, but on this I agree 100%.

 

I can only assume they expect to get some of it themselves, but from what I've been hearing, EVs are about to hit a brick wall as people realise their resale value is probably zip. Perhaps this is looting the company before it collapses.