Elon Musk, co-founder of Tesla and SpaceX and owner of X Holdings Corp., speaks at the Milken Institute Global Conference at the Beverly Hilton Hotel, on May 6, 2024 in Beverly Hills, California.
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Tesla shares appear in premarket, aftermarket trading Elon Musk said shareholders are set to approve his controversial $56 billion pay package and resolution to move the electric car company to Texas.
At 4:49 a.m. ET on Thursday, Tesla shares were 6.85% higher in premarket trading.
Tesla shareholders voted on two resolutions and may have their say before the company’s annual meeting on Thursday. The first measure under consideration is whether to green-light the $56 billion pay package that shareholders initially approved in 2018, before being approved. invalidated by a Delaware judge in January.
The second resolution is whether Tesla should change its state of incorporation from Delaware to Texas. That suggestion came after Musk asked his followers on social media platform X earlier this year whether Tesla should make such a move – and they all agreed.
Both resolutions are currently passing by a “wide margin,” Musk said, without disclosing specifics.
The initial payout package sets aggressive targets for Tesla’s financial performance and market value – and although the company has become one of the world’s largest electric car makers, many has changed since 2018.
Tesla is facing slowing growth and increasing competition, especially from Chinese players. During that time, Musk also bought Twitter, now called Xand has increased its focus on other projects, including its own brain computer interface company Neuralink And artificial intelligence company xAI.
Critics of the pay deal say Musk was distracted by his other endeavors and that the bid, the largest in U.S. corporate history, was excessive. More recently, they said that Tesla’s financial performance was not at its peak.
Several notable shareholders said they plan to vote against the deal and top proxy advisors Institutional Shareholder Services and Glass Lewis Also recommend this step. The California State Teachers’ Retirement System, a giant pension fund, also opposed the package, claiming that the amount was too high. of Norway national investment fund similarly also objected.
Shareholders who support the compensation claim that Musk is indispensable to Tesla’s future success and that the billionaire will try to go elsewhere if he is not adequately reimbursed. They argue that the pay package incentivized Musk.
Billionaire investor and longtime Tesla shareholder Ron Baron said he is voting in favor of the payment packagesuggests that Musk is key to the electric vehicle maker’s future.
“At Baron Capital, our answer is clear, unequivocal: Tesla is better off with Elon. Tesla is Elon,” he said this month.
Meanwhile, some major investors, such as Vanguard and Blackrock, have not yet said how they will vote.
