In a bold move, Tesla Inc. has announced plans to present its shareholders with a pivotal vote on June 13, aimed at reinstating the staggering $55.8 billion compensation package for CEO Elon Musk. This package was previously nullified by Delaware’s Chancery Court. The voting agenda also includes a proposal to shift Tesla’s incorporation from Delaware to Texas.
Tesla To Vote On Reviving Musk’s $55B Pay: A Strategic Push Amid Legal Tangles
Tesla’s decision comes after a controversial court ruling on January 30, which invalidated the original compensation agreement ratified in 2018. Despite a substantial 73% approval rate from disinterested shareholders at that time, the court cited significant flaws in the approval process, notably influenced by Musk’s heavy involvement in the setting and timing of compensation terms.
Tesla Chairperson Robyn Denholm has voiced strong disagreement with the court’s decision, expressing it through the company’s proxy statement. Denholm asserts that the ruling contradicts fundamental corporate law principles and undermines the intentions of Tesla’s shareholders. She implores shareholders to rectify what Tesla views as an injustice to Musk, who has not received payment for his contributions over the past six years—a period marked by considerable growth and value generation for the company.
From Delaware to Texas: Tesla’s Reincorporation Strategy
Adding to the corporate drama, Tesla is also seeking shareholder approval to relocate its legal home to Texas, where its expansive “gigafactory” and a significant portion of its operations are already based. Denholm argues that Texas represents a more fitting backdrop for Tesla’s mission to propel the global shift to sustainable energy.
