“1:31 Tesla co-founder and CEO Elon Musk gestures during the unveiling of Tesla’s newly unveiled all-electric, battery-powered Tesla Cybertruck at the Tesla Design Center in Hawthorne, California, November 21, 2019. Frederick J. Brown/AFP via Getty Images Tesla shareholders rewarded CEO Elon Musk with a pay package on Thursday that could give the tech giant […]”, — write: businessua.com.ua
1:31 Tesla co-founder and CEO Elon Musk gestures during the unveiling of Tesla’s newly unveiled all-electric battery-powered Tesla Cybertruck at the Tesla Design Center in Hawthorne, California on November 21, 2019. Frederick J. Brown/AFP via Getty Images
Tesla shareholders rewarded CEO Elon Musk with a pay package Thursday that could provide the tech entrepreneur with nearly $1 trillion in compensation over the next decade
The pay package would make Musk the highest-paid CEO on record. Musk could earn roughly $900 billion over the life of the deal, according to a securities filing in September.
Approval of the compensation package received more than 75% of shareholder votes, Tesla General Counsel Brandon Earhart said during a shareholder meeting Thursday.
The full compensation will only be granted if Musk increases the company’s current value from $1.1 trillion to $8.5 trillion, a figure that exceeds the current combined market value of Meta, Microsoft and Alphabet’s Google, the statement said.
The compensation package also includes a number of production goals, including one million Robotaxis in commercial operation and the delivery of one million humanoid robots over the next 10 years, according to the securities filing.
Before Tesla released the results of the shareholder vote, some major shareholders said they voted against the proposal. Norway’s $2 trillion sovereign wealth fund said on Tuesday it had voted against the payout package, raising concerns about its scale and potential risks.
“While we appreciate the significant value created by Mr. Musk’s visionary role, we are concerned about the overall size of the compensation, dilution and the lack of risk mitigation of key individuals in line with our views on executive compensation,” fund manager Norges Bank Investment Management said in a statement.
Musk, who is considered the richest man in the world, currently boasts a fortune of about $504 billion, according to Forbes. If he received his full salary, Musk would become the world’s first trillionaire.
The pay package could also increase Musk’s ownership stake in Tesla to 29%. Musk has long sought to obtain a larger share of ownership.
“We are at a pivotal juncture in Tesla’s history, and the proposals carefully crafted by the Special Committee and the Board of Directors will help shape Tesla’s future,” the company’s website said earlier this week. “If you believe, as we do, that Elon is the CEO who can make our ambitious vision a reality, vote NOW.”
Online shareholder voting ended at 11:59 a.m. ET Wednesday.
The company’s new compensation package has arrived, as Musk’s previous payment plan remains in legal limbo.
Last year, a Delaware judge twice rejected Musk’s $50 billion 2018 pay package.
Aerial view of Tesla Shanghai Gigafactory, March 29, 2021, Shanghai, China. Xiaolu Chu/Getty Images
Chancellor Kathleen McCormick of the Court of Chancery, which hears corporate governance litigation for companies incorporated in Delaware, initially declared that negotiations over the package were inappropriate because of a lack of independence among board members and Musk’s problematic influence on those negotiations.
In a second ruling, McCormick ruled that an additional shareholder vote on the compensation package—even if done with full knowledge of the initial problems with the deal negotiations—could not eliminate those problems. Musk appealed the decision.
Tesla reported a 12% jump in third-quarter revenue in October, snapping a streak of two consecutive quarters of declining sales.
However, earnings did not meet analysts’ expectations, which led to a drop in the share price. Overall, Tesla shares are up about 16% this year, roughly matching the jump in the S&P 500 over the period.
Musk’s tenure as a “special civil servant” in the Trump administration, which ended in May, sparked demonstrations at Tesla dealerships around the world to protest his efforts to cut government spending as head of the Department of Government Efficiency.
On an earnings call in June, Musk raised questions about his control of the company, which Morgan Stanley analysts said was 13%.
“As I’ve mentioned before, I think I should have enough control over Tesla to ensure that it goes in a good direction, but not so much control that I can’t be kicked out if I go crazy,” Musk joked.
Source: abcnews.go.com
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