At the Tesla shareholder meeting, a proposal to reward Tesla CEO Elon Musk with tens of billions of dollars was passed. Another proposal to move Tesla’s corporate headquarters from Delaware to Texas also passed.
On June 13, Tesla announced at the annual shareholders meeting held at its headquarters in Austin, Texas, that a proposal to re-approve the 2018 Compensation Plan (2018 CEO pay package), which grants Musk stock options worth tens of billions of dollars depending on his management performance, was passed.
This approved compensation plan grants Musk 330 million stock options in 12 installments if he achieves performance based on Tesla’s sales and market capitalization, among other factors.
The value of the 330 million stock options was once $56 billion. However, with Tesla’s closing price of $182.47 on June 13, it amounts to $48 billion.
After this compensation plan was approved by the board of directors and the shareholders in 2018, Musk achieved all the contractual management performance and received all the stock options.
However, small shareholder Richard Tornetta filed a lawsuit to invalidate this. In January this year, when Tornetta won a preliminary victory, Musk was at risk of having to return all the stock options he had received so far.
The Tesla board of directors proposed re-approving this compensation plan at the shareholders’ meeting to prove that the shareholders support Musk and prepare a favorable position in the appeal trial.
Just because the shareholders re-approved Musk’s compensation plan at the shareholders’ meeting does not mean it immediately affects the lawsuit.
However, confirming the shareholders’ support for Musk is expected to influence the future appeal trial. In other words, Musk now has the upper hand in the upcoming lawsuit.
Upon approving his performance compensation plan at the shareholders meeting, Musk said, “I want to start with fiery words,” and added, “I love you all.”
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