'I Love You Guys,' Musk Says After Shareholder Vote

But he still faces legal fight to have massive Tesla pay package restored
By Rob Quinn,  Newser Staff
Posted Jun 14, 2024 6:43 AM CDT
Musk Still Faces Legal Fight Over Pay Package
Tesla's Gigafactory is seen, Thursday, June 13, 2024, in Austin, Texas.   (AP Photo/Eric Gay)

At Tesla's annual meeting in Austin on Thursday, the company confirmed that shareholders had approved both Elon Musk's massive pay package, along with a proposal to change the company's state of incorporation from Delaware to Texas. Tesla didn't disclose vote totals, Bloomberg reports, but Musk said Wednesday night that both measures were ahead by "wide margins." The all-stock compensation plan was worth around $56 billion at one point. After a fall in Tesla's stock price, the company put the value at $44.9 billion in an April filing, the AP reports. The vote doesn't automatically restore the pay package, but it will likely give Musk a boost in legal battles to come.

  • The Wall Street Journal looks at the legal issues in Delaware, where a judge struck the pay package down in a shareholder lawsuit earlier this year. Tesla is expected to push to have the case dismissed, but shareholder Richard Tornetta will likely challenge the effort. Analysts expect Tornetta to argue that the shareholder vote isn't legally binding.

  • Charles Elson, founder of the corporate governance center at the University of Delaware, says the vote is unlikely to affect the ruling from Judge Kathaleen McCormick of Delaware's Court of Chancery, the AP reports. He says her ruling made the 2018 pay package a "gift" to Musk, which would require unanimous shareholder approval.
  • Baker Botts lawyer John Lawrence, however, argues that Tesla now has a much better chance of overturning the ruling, which said Tesla failed to fully inform shareholders about the approval process. "This shareholder vote is a strong signal that you now have an absolutely well-informed body of shareholders," he tells the AP. "The judge in Delaware still could decide that this doesn't change a thing about her prior ruling and doesn't require her to make any different ruling going forward. But I think it definitely gives Tesla and Musk strong ammunition to try to get her to revisit this."
  • The vote was seen as a referendum on Musk's leadership of Tesla, the Verge reports. "I just want to start off by saying, hot damn, I love you guys," he said when he took the stage at the company meeting.
(More Elon Musk stories.)

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