Please ensure Javascript is enabled for purposes of website accessibility
Elon Musk Wins Back His $44.9 Billion Tesla Pay Package in Shareholder Vote
gvw_ap_news
By Associated Press
Published 6 months ago on
June 13, 2024

Shareholders reapprove Musk’s record compensation amid legal disputes. (AP File)

Share

Getting your Trinity Audio player ready...

DETROIT — Tesla shareholders voted Thursday to restore CEO Elon Musk’s record $44.9 billion pay package that was thrown out by a Delaware judge earlier this year.

Vote totals weren’t immediately announced at Tesla’s annual stockholders’ meeting, but the company said they voted for Musk’s compensation plan, which initially was approved by the board and stockholders six years ago.

Compensation Package Tied Up in Legal Battles

The favorable vote doesn’t necessarily mean that Musk will get the all-stock compensation anytime soon. The package is likely to remain tied up in the Delaware Chancery Court and Supreme Court for months as Tesla tries to overturn the rejection by a Delaware judge.

Tesla last valued the package at $44.9 billion in an April regulatory filing. It was once as much as $56 billion but has declined in value in tandem with Tesla’s stock, which has dropped about 40% in the last 12 months.

Delaware Court’s January Ruling and Tesla’s Appeal

Chancellor Kathaleen St. Jude McCormick ruled in January in a shareholder’s lawsuit that Musk essentially controlled the Tesla board when it ratified the package in 2018, and that it failed to fully inform shareholders who approved it the same year.

Tesla has said it would appeal, but asked shareholders to reapprove the package at Thursday’s annual meeting.

A separate issue to move the company’s legal home to Texas to avoid the courts in Delaware, where Tesla is registered as a corporation.

Shareholder Vote and Legal Implications

Legal experts say the issue of Musk’s pay will still be decided in Delaware, largely because Musk’s lawyers have assured McCormick that they won’t try to move the case to Texas.

But they differ on whether the new approval of the pay package will make it easier for Tesla to get it approved.

Charles Elson, a retired professor and founder of the corporate governance center at the University of Delaware, said he doesn’t think the vote will influence McCormick, who issued a decision based on the law.

John Lawrence, a Dallas-based lawyer with Baker Botts who defends corporations against shareholder lawsuits, agreed that the vote doesn’t end the legal dispute and automatically give Musk the stock options. But he says it gives Tesla a strong argument to get the ruling overturned.

He expects Musk and Tesla to argue that shareholders were fully informed before the latest votes, so McCormick should reverse her decision. But the plaintiff in the lawsuit will argue that the vote has no impact and isn’t legally binding, Lawrence said.

If the ruling stands, then Musk likely will appeal to the Delaware Supreme Court, Lawrence said.

Musk’s Vision for Tesla’s Future

After the votes were announced, Musk began telling shareholders about new developments in the company’s “Full Self-Driving” system. He has staked the company’s future on development of autonomous vehicles, robots and artificial intelligence.

“Full Self-Driving” keeps improving with new versions, and there’s no question it will exceed the safety of human drivers, Musk said without giving a time frame.

Despite its name, “Full Self-Driving” can’t drive itself, and the company says human drivers must be ready to intervene at all times. Tesla’s “Full Self-Driving” hardware went on sale late in 2015, and Musk has used the name ever since as the company gathered data to teach its computers how to drive.

In 2019, Musk promised a fleet of autonomous robotaxis by 2020, and he said in early 2022 that the cars would be autonomous that year. In April, Musk said the system should be ready in 2023.

Since 2021, Tesla has been beta-testing “Full Self-Driving” using volunteer owners. U.S. safety regulators last year made Tesla recall the software after finding that the system misbehaved around intersections and could violate traffic laws.

RELATED TOPICS:

DON'T MISS

CalFire Shares 2024’s Top Images. See Highlights of Intense Wildfire Season.

DON'T MISS

While Sherrod Motors to Boise, Entz’s Bulldogs Add a Coach, Transfers, Recruits

DON'T MISS

California and Texas Duke It Out for Worst State to Raise a Family

DON'T MISS

Musk Slams ‘Wokepedia’ for Biased Editing, Urges Donation Boycott

DON'T MISS

Explore the Holiday Magic in California’s Death Valley

DON'T MISS

Visalia Unlicensed Driver Smashes Into Home. No Injuries Reported.

DON'T MISS

Penn State’s Schumacher-Cawley Is 1st Female Coach to Win NCAA Volleyball Title

DON'T MISS

Myles Turner Hits Late 3-Pointer, Scores 23 as Pacers Beat Warriors

DON'T MISS

What Is Israel’s US Funded Plan for the Middle East?

DON'T MISS

Caitlin Clark Honored as AP Female Athlete of the Year

UP NEXT

California and Texas Duke It Out for Worst State to Raise a Family

UP NEXT

Musk Slams ‘Wokepedia’ for Biased Editing, Urges Donation Boycott

UP NEXT

Explore the Holiday Magic in California’s Death Valley

UP NEXT

Visalia Unlicensed Driver Smashes Into Home. No Injuries Reported.

UP NEXT

Penn State’s Schumacher-Cawley Is 1st Female Coach to Win NCAA Volleyball Title

UP NEXT

Myles Turner Hits Late 3-Pointer, Scores 23 as Pacers Beat Warriors

UP NEXT

What Is Israel’s US Funded Plan for the Middle East?

UP NEXT

Caitlin Clark Honored as AP Female Athlete of the Year

UP NEXT

Rams Don’t Dominate, but They’re Mastered Winning Ugly

UP NEXT

What Goes on at Fresno County School Board Meetings? It’s Hard to Tell

Musk Slams ‘Wokepedia’ for Biased Editing, Urges Donation Boycott

6 hours ago

Explore the Holiday Magic in California’s Death Valley

6 hours ago

Visalia Unlicensed Driver Smashes Into Home. No Injuries Reported.

7 hours ago

Penn State’s Schumacher-Cawley Is 1st Female Coach to Win NCAA Volleyball Title

7 hours ago

Myles Turner Hits Late 3-Pointer, Scores 23 as Pacers Beat Warriors

8 hours ago

What Is Israel’s US Funded Plan for the Middle East?

8 hours ago

Caitlin Clark Honored as AP Female Athlete of the Year

8 hours ago

Rams Don’t Dominate, but They’re Mastered Winning Ugly

8 hours ago

What Goes on at Fresno County School Board Meetings? It’s Hard to Tell

9 hours ago

Elaborate Holiday Light Displays Are Making Spirits Bright in a Big Way

9 hours ago

CalFire Shares 2024’s Top Images. See Highlights of Intense Wildfire Season.

CalFire took to social media Tuesday to showcase its most viewed images of 2024, offering a poignant reminder of the year’s challenging wild...

4 hours ago

4 hours ago

CalFire Shares 2024’s Top Images. See Highlights of Intense Wildfire Season.

4 hours ago

While Sherrod Motors to Boise, Entz’s Bulldogs Add a Coach, Transfers, Recruits

5 hours ago

California and Texas Duke It Out for Worst State to Raise a Family

Photo of Elon Musk
6 hours ago

Musk Slams ‘Wokepedia’ for Biased Editing, Urges Donation Boycott

6 hours ago

Explore the Holiday Magic in California’s Death Valley

A vehicle crashed into a home on North Cain Street in Visalia Tuesday morning, causing minor property damage but no injuries, with the unlicensed driver cited at the scene. (Visalia PD)
7 hours ago

Visalia Unlicensed Driver Smashes Into Home. No Injuries Reported.

7 hours ago

Penn State’s Schumacher-Cawley Is 1st Female Coach to Win NCAA Volleyball Title

8 hours ago

Myles Turner Hits Late 3-Pointer, Scores 23 as Pacers Beat Warriors

Help continue the work that gets you the news that matters most.

Search

Send this to a friend