MILAN – Elon Musk wins the tug of war with the shareholders and is preparing to become the highest paid CEO ever. The shareholders’ meeting of Tesla voted in favor of the huge remuneration package in shares with an original value of 56 billion, which today fell to 48.9 billion considering the closing values of the stock yesterday. The pay deal was originally authorized in 2018 but was later struck down in January by a Delaware court. With the assembly’s vote, the proposal to move Tesla’s registered office from Delaware to Texas also passed by a wide margin, a move linked precisely to the ‘anti-bonus’ ruling and which aims to transfer the headquarters into legislation considered more ‘friendly’ towards the managerial policies and political vision of the entrepreneur of South African origins.
The iron arm
A battle between shareholders had broken out in recent weeks around the huge pay bonus for Musk. For example, the Norwegian Sovereign Fund and the Californian pension fund, the largest in the country, expressed their opposition. Just as Glass Lewis’ proxy advisors had recommended voting against. In recent days the president of the company had also expressed her opinion, inviting instead to express herself favorably so as not to risk that a no would push Musk to abandon the company.
The controversy
However, the new green light from Tesla’s annual general meeting – against which large investors had lined up – does not mean that Musk will automatically receive the package of shares in question. In 2018, a 73% majority of shareholders voted in favor of granting the stock package to Musk, which included the right to receive millions of Tesla shares in several blocks if the company achieved a series of ambitious goals in a maximum period of 10 years. A shareholder had sued against this decision, and a Delaware judge had ruled that Musk, as part of Tesla’s board of directors, had had too much influence in negotiations over the generous compensation, saying that shareholders had been kept in the dark about his involvement , so as not to make an educated decision.
The agreement
The deal on the table envisaged that Musk would receive approximately 300 million Tesla shares in installments at the 2018 price if Tesla achieved a series of objectives over a period of up to 10 years, including an increase in its stock market value from approximately 50 billion of dollars to 650 billion, a goal that had been reached and exceeded, leading the company to even exceed one thousand billion dollars. However, today demand has slowed significantly and Tesla is now worth around $580 billion on Wall Street.
