Tesla investors vote on Elon Musk's pay package for more than their money

Tesla investors vote on Elon Musk's pay package for more than their money
Tesla begins voting to approve Elon Musk's 2018 compensation package (REUTERS/Gonzalo Fuentes/File)

Even though Partners of Tesla Inc. Vote this week to approve the CEO's $56 billion compensation package Elon MuskThe judge's decision to void the 2018 compensation agreement is unlikely to be reversed.

That's the reason June 13 poll It carries symbolic weight rather than legal authority. Approval of Partners can help Tesla With an appeal or retrial in a new case, however, the Chancery Court judge's January decision cannot be overturned Kathleen Saint Jude McCormickAccording to some legal scholars.

“People think it's like direct democracy, and if they vote yes, they have to reauthorize the worker's compensation program. ElonIt fixes what it is President McCormick,” he said Christina SatterProfessor of Law Southern Methodist University Inside Dallas. “But this is unprecedented.”

Tesla The vote is called part of an unconventional legal strategy. Revisit to correct defects in process Partners Approve the salary Musk Six years ago. In his judgment, McCormick It pointed to conflicts of interest among directors and the company's failure to adequately disclose the terms of its executive compensation plan.

He Automaker Bets on Delaware Supreme CourtIt will hear any appeal of the judgment McCormick, Have a favorable view Investors Reconfirms the agreement. However, Tesla noted in its proxy that it cannot guarantee a successful outcome.

“We cannot predict with certainty how a poll will confirm compensation Musk Under the Act Delaware In these innovative circumstances,” the company wrote.

win or lose, Musk And Tesla Until then they cannot appeal McCormick Decide the legal fees of the case and issue the final judgment.

See also  Joan Laporte finally clarifies whether Messi will return to FC Barcelona next season

Clear and immediate impact A vote on Musk's compensation could strengthen or weaken the billionaire's influence at the company. Until June 7, stocks Tesla It has fallen 29% this year amid growing competition for electric vehicles and a slowdown in sales, and polls are widely seen as a downer on his leadership.

Klaus Lewis & Co. And Corporate Partner ServicesTwo major proxy advisors have recommended Partners Reject the compensation package. ISS He said it was “excessive from the start” and failed to meet some of the targets set by the group.

The June 13 vote carries more symbolic than legal weight for Tesla. (REUTERS/Mike Blake/File)

This is seen as a way to retain the award Musk approach Inside Tesla. Since 2018, he has sold shares Tesla to purchase Xpreviously known Twitterand established xAI, so he now oversees six companies. It has threatened to develop more AI products outside the automaker if it cannot increase its stake in Tesla from its current 13% to 25%.

“What we recognized in 2018, we continue to recognize today Elon You certainly don't have unlimited time,” the board president wrote. Robin Denholm, in a letter to shareholders last week. “There's no shortage of ideas and other places where you can make an incredible difference in the world. We want those ideas, that energy and that time to be there. Tesla, for the benefit of you, our owners. But it requires mutual respect.”

Denholm He is familiar with adults Institutional investors In the days leading up to the polls. Tesla It also offers an exclusive tour of the factory Musk As a potential gift Partners We can prove who voted.

See also  Meet the new Miss Dominican Republic Universe Andrina Martinez

Zohar GoshenProf Columbia Law School Expertise in issues Company LawHe said he would restart the approval process for payment Musk The right way to correct defects McCormick The billionaire was identified with a tie Tesla.

“That is the judgment of the court Tesla It does not mean that the compensation package in 2018 is not properly approved Musk Not entitled to any compensation for the last six years of service,” he wrote Goshen In an opinion piece Bloomberg Law.

In 2018, 73% Tesla shareholders Voters approved the compensation plan Musk. A “vote” website Tesla” argues the company Sharing democracy is at risk. Partners.”

Tesla and Musk cannot appeal pending McCormick's final ruling. (REUTERS/Tingshu Wang/File)

In addition to compensation MuskThe Partners They will also vote in the project Tesla Your move Jurisdiction from Delaware to Texas. Tesla already based AustinAnd the company argues that “it's time to make our business home our legal home.”

Charles ElsonRetired Prof University of Delaware Who founded Weinberg Center for Corporate Governance From school, he said Texas Courts may have a more favorable view of Musk Compensation SchemeBut the poll is unlikely to sway the judges Delaware.

I do not agree with the position at all Tesla Mr. Musk They can be destroyed by some sort of repetition,” he said. ElsonA friend of the court brief has been filed in the compensation case Musk. “The new vote is only important if Tesla directors decide to start the process in a new state.

See also  Ecuador sinks homes in central Jerome in El Oro | News

(c) 2024, Bloomberg

Arzu Daniel

"Extreme pop culture lover. Twitter enthusiast. Music ninja. Booze. Communicator. Bacon nerd in general."

Leave a Reply

Your email address will not be published. Required fields are marked *