Tesla will hold a shareholder vote to reinstate its $56 billion payout package, just days after the company announced it would do so. laid off 14,000 employees, or 14% of its workforce. Shareholders’ voting will be held at the Annual General Meeting of Shareholders on June 13, 2024.
This is also a payment package worth $56 billion in the form of Tesla stock options that were previously applied. invalidated by the court back in January 2024. The court decided Elon Musk’s Tesla compensation plan from 2018 was not developed through a fair process due to his significant influence over Tesla and its associated directors. regarding plan approval. Delaware Judge Kathaleen McCormick ruled that rescission was an appropriate remedy.
Musk’s $56 billion compensation plan is the largest ever developed in the history of public companies and involves 12 tranches of Tesla stock options, which will vest if the company’s market capitalization increase by $50 billion and Tesla reaches its revenue target.
In the case, it was decided that those who negotiated the CEO’s pay package on Tesla’s behalf were influenced by the CEO. So, although shareholders voted in favor of the compensation plan, we don’t know whether they might vote for a less generous plan.
Musk previously expressed concerns about not having at least a 25% stake in Tesla. He says it’s not about the money but that 25% is needed to influence the company’s direction. He implied he wanted to work on projects outside of Tesla if he couldn’t have 25%.
He added that owning 13% of the shares currently is not enough incentive to “go to work,” referring to other shareholders such as Fidelity who currently own similar amounts of shares but are not expected to go to work.
The $56 billion payment package could be restored by voting again, this time ensuring the loopholes that allowed the court ruling are filled.
In addition to voting on the pay package, shareholders will also be asked to approve the reincorporation of the company in Texas. The reason for this is that the Delaware court did not respect the wishes of Tesla shareholders by reversing the pay package that shareholders had previously approved. Texas was chosen because Tesla already has its headquarters and a large factory in Texas.
You can read more about the vote at supportteslavalue.com
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