Tesla CEO Elon Musk said on Wednesday night that votes to reinstate his pay package and move the company’s incorporation to Delaware were passing by a “wide margin.” File Photo by Filip Singer/EPA-EFE
Tesla CEO Elon Musk said he expects shareholders to vote to reinstate his $56 billion compensation package with results of the vote set to be announced Thursday afternoon.
Musk wrote on X, which he owns, that the resolution to reinstate the pay package and a second to move Tesla’s incorporation from Delaware to Texas were passing by “wide margins” as of Wednesday evening. Advertisement
That news sent Tesla stocks jumping nearly 7% in premarket trading going into Thursday morning.
The results of the votes will be announced at the company’s annual meeting at 4:30 p.m. EDT.
Musk declared success despite several prominent investors — including the California State Teachers’ Retirement System and Norway’s Sovereign Wealth Fund — saying they would reject the call to reinstate the pay package and proxy advisory firms Glass Lewis and Institutional Shareholder Services also urging shareholders to vote against the resolution.
The vote is also not legally binding, opening up the possibility of legal hurdles including from the Delaware court that initially struck it down.
Tesla announced the plans to bring the vote to shareholders in an April proxy filing which said the court’s decision to strike down the pay package caused a “fundamental problem for the company” and circumvented the will of an “overwhelming majority of shareholders” who voted to approve it. Advertisement
Delaware Chancery Court Chancellor Kathleen McCormick called Musk’s compensation package “unfair” adding that he held too much control to set the rules and the price, in her January ruling that agreed with complaints by shareholder Richard Tornetta.
At the time of the ruling Musk had also sought to increase his ownership of Tesla stock from 13% to 25% to facilitate his work on artificial intelligence.
He lashed out after the ruling, writhing “Never incorporate your company in the state of Delaware,” on X and posting a poll asking users whether the company should move its incorporation to Texas.
The vote comes as Tesla decreases its workforce via layoffs when facing stiff competition in the electric vehicle market, particularly from China. While Musk supporters say that Musk is the key to the company’s future, foes charge he has become distracted after buying X and starting his own artificial intelligence company xAI.
