Voting is still ongoing but Elon Musk on X has already announced its victory: the South African-born tycoon will receive the much-discussed salary from 56 billion dollars. In the end, therefore, Tesla shareholders gave the OK to the huge compensation remuneration despite the voices to the contrary (above all that of the Norwegian sovereign wealth fund) and the risk of a legal battle that has not yet concluded. Evidently, the appeal to shareholders by Tesla board chairwoman Robyn Denholm was successful convince them to vote in favor of Musk and to prevent the founder from taking other paths by taking his ideas and his elsewhere, perhaps to a new company AI projects. Of course, it is difficult to reconcile a such compensation with news about layoffs It is on decline in sales, moreover in a global context that sees electric cars in difficulty. But high finance works like this and it is almost never fair.
THE STORY OF THE 56 BILLION TESLA TO ELON MUSK
The $56 billion compensation package was outlined in 2018 but later overturned by a Delaware judgeaccording to which the amount of the prize was disproportionate, contrary to the interest of investors and approved by a board of directors ‘slave to Musk’. However, we have learned in recent years that the good Elon hardly accepts contrary decisions, hence the choice to subject the maxi compensation to a second vote by the shareholders’ meeting, scheduled for 13 June 2024. As mentioned, the polls are still open but Musk has already anticipated the outcomeposting on (his) social network X a graph that seems to show the achievement of the majority of preferences and the comment “Both Tesla shareholder resolutions are passing by wide margins!“, referring to both the approval of the compensation package and the plan to move Tesla headquarters from Delaware to Texas. However, we will have to wait a little longer for the results to become official.
ELON MUSK AND THE 56 BILLION FROM TESLA: BATTLE BETWEEN LARGE AND SMALL PARTNERS
In case of official confirmation, the green light would represent a personal success for Elon Muskwho to avoid the distrust of some large Tesla investors such as the Norwegian sovereign fund Norges and the largest pension fund in the United States, Calpers, openly opposed to the maxi salary, had to appeal to the ‘base’ of the car company’s members made up of very numerous small savers who have been faithful to him for years. Small members who generally don’t even take part in the assembly votes but who were there for an occasion like this recruited one by one by the entrepreneur himself, even with the promise of some benefits.
THE STORY WILL NOT END HERE
If the predictions of the last few hours turn out to be correct and Elon Musk really manages to obtain the maxi compensation from 56 billion dollarsobviously this money will not be delivered to him in small denomination coins and banknotes (curiosity: how many briefcases does it take to contain a similar amount?) but in the form of options (stock-option) which, once exercised, will allow him to increase its stake in Tesla by 25%., today it stands at 13%. An objective considered vital by Musk to have free control over the control, adoption and development of AI within the company. In any case, the story of the maxi compensation it will not end with the vote on June 13th, regardless of the outcome, because the final decision will be up to the Delaware court. But appearing before the judge with the approval of the assembly would certainly work in the tycoon’s favor.
Only in case of green light from the court, Musk will be able to exercise the options immediately or defer them over time until 2028i.e. the achievement of a series of objectives regarding Tesla’s turnover, profits and stock market valuation.
