Musk cheers 'wide margin' of support for record $56bn Tesla pay package

Elon Musk has claimed a "wide margin" of support among Tesla shareholders for a $56bn pay package due to him but which was blocked by a court.

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

The $56bn (£43.4bn) figure - the highest award ever seen in corporate America - does not consist of salary or bonus pots.

The sum arises purely out of rewards for Tesla meeting revenue and market value targets over 10 years.

Tesla said that investors were given full disclosure, including the court's ruling, ahead of the fresh pay ballot.

If it passes, as Musk believes it will, then the issue moves back to the court for ratification.

Legal experts have said the process is unprecedented and could take months - complicated by possible challenges to the shareholder vote result.

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

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

"Thanks for your support!!" Musk said in a fresh post aimed at Tesla investors early on Wednesday.

Texas governor Greg Abbott responded: "Welcome to a state that has neither a personal nor a corporate income tax."

The results are due to be declared on Thursday night.

While Musk is confident of winning the day, there has been opposition.

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

Large investors who declared opposition included Norway's sovereign wealth fund.

Their concerns, which undoubtedly include the $56bn sum, will likely extend to share performance since their 2021 peak.

Tesla's stock has lost nearly 60% of its value since that time.

Then, Musk started selling billions of dollars worth of his Tesla stake partly to help finance his purchase of Twitter, which he renamed X.

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

The Tesla board has argued that Musk deserves the package because he hit all the ambitious targets on market value, revenue and profitability set at the time.

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

Columbia Law School Professor Zohar Goshen told the Reuters news agency he thought the Delaware court decision should reverse itself.

He said: "It is hard to estimate how the court will rule because there is too much noise around this decision. But my personal view is that Tesla should succeed."

Source: Sky News
Image: Straight Arrows News