Tesla shareholders approve US$878 billion pay plan for Elon Musk
Tesla’s board had warned Musk could quit if the pay package was not approved
[SAN FRANCISCO] Tesla CEO Elon Musk scored a resounding victory on Thursday as shareholders approved a pay package of as much as US$878 billion over the next decade, endorsing his vision of morphing the EV maker into an AI and robotics juggernaut.
Shares of Tesla rose about 1 per cent in after-hours trading. The proposal was approved with over 75 per cent support.
Musk took to the stage in Austin, Texas, along with dancing robots. “What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” he said. “This really is going to be quite the story.”
He added: “Other shareholder meetings are like snoozefests, but ours are bangers. I mean, look at this. This is sick.”
Shareholders also reelected three directors on Tesla’s board and voted in favour of a replacement pay plan for Musk‘s services because a legal challenge has held up a previous package. Shareholders also voted in favour of a proposal asking the board to hold annual elections for all board members.
The vote, analysts have said, is a positive for Tesla’s stock, whose valuation hangs on Musk‘s vision of making vehicles drive themselves, expanding robotaxis across the US and selling humanoid robots, even though his far-right political rhetoric has hurt the Tesla brand this year.
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A win for Musk was widely expected as the billionaire was allowed to exercise the full voting rights of his roughly 15 per cent stake after the automaker moved to Texas from Delaware, where a legal challenge has held up a previous pay rise. The approval comes even after opposition from some major investors, including Norway’s sovereign wealth fund.
Tesla’s board had said Musk could quit if the pay package was not approved.
The vote will also allay investor concern that Musk‘s focus has been diluted with his work in politics as well as in running his other companies, including rocket maker SpaceX and artificial intelligence startup xAI.
The board and many investors who lent their endorsement have said the nearly US$1 trillion package benefits shareholders in the longer run as Musk must ensure Tesla achieves a series of milestones to get paid.
Goals for Musk over the next decade include the company’s delivering 20 million vehicles, having 1 million robotaxis in operation, selling 1 million robots and earning as much as US$400 billion in core profit. But in order for him to get paid, Tesla’s stock value has to rise in tandem, first to US$2 trillion from the current US$1.5 trillion, and all the way to US$8.5 trillion. REUTERS
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