Elon Musk Secures Shareholder Support for $52 Billion Pay Package
Tesla Shareholders Overturn Judge’s Decision on Musk’s Salary
In a decisive vote held on Thursday, Tesla’s shareholders restored CEO Elon Musk to the presidential pay plan that was annulled by a Delaware judge in February. The $55.8 billion package—equivalent to around €52 billion—will now be enforceable again.
Key Outcomes of the Shareholder Meeting
- Reinstatement of Musk’s 55.8 billion‑dollar compensation package.
- Approval to move Tesla’s incorporation from Delaware to Texas.
- Shift to a new corporate structure in compliance with Texas laws.
Implications
By overturning the court order, Tesla investors signal confidence in Musk’s leadership and the company’s growth strategy. The relocation to Texas aligns the legal domicile with the company’s physical headquarters, potentially simplifying regulatory oversight.
Shareholder Vote Restores Elon Musk’s $55.8 Billion Compensation Package
In a narrow decision announced on X (formerly Twitter), Tesla shareholders approved the reinstatement of founder and CEO Elon Musk’s substantial pay plan, which had been declared void by a Delaware judge in January. The package, originally valued at $55.8 billion (€52 billion), now stands at $48.4 billion (€45 billion) after Tesla shares fell 26% over the course of the year, despite a recent 2.9% uptick.
Key Voting Outcomes
- Restoration of Musk’s compensation bundle.
- Approval to move Tesla’s corporate domicile from Delaware to Texas.
Compensation Details
The 2018‑initiated incentive plan could increase Musk’s percentage of Tesla holdings to roughly 21% if he fully exercises the options. The vote reflects strong investor confidence in Musk’s leadership but does not guarantee the payout; it merely provides public backing to challenge the court’s ruling.
Musk’s Portfolio
Beyond Tesla, Musk runs additional ventures such as SpaceX, xAI, X Corp, Neuralink, and OpenAI. He has indicated the possibility of developing AI products externally if he cannot secure at least a 25% stake in them.
Shareholder Concerns
Investors are wary that rejecting the compensation package could prompt Musk to depart from Tesla altogether, potentially jeopardizing the company’s future direction.
Elon Musk’s 2018 pay plan
Elon Musk’s 2018 Tesla Pay Plan Under Scrutiny
In 2018, Tesla’s board approved a forward‑looking compensation strategy for chief executive Elon Musk. The scheme, devoid of a fixed salary or traditional bonus, hinged entirely on the company’s future performance.
Key Features of the Compensation Package
- “Option 20.3 million shares,” roughly 12% of Tesla’s outstanding shares at that time.
- Graded into 12 tranches, each unlocking after specific milestones.
- Capitalisation triggers: starts at $100 billion, increases in $50 billion steps up to $650 billion.
- Operational triggers: reaching $175 billion in revenue, $14 billion in adjusted gross earnings.
Had Musk cleared all the conditions, the option pool could feed a stock valuation of over $56 billion.
Legal Challenges & Potential Outcome
A Delaware court declared the original approval invalid in January, citing that shareholders were not fully disclosed about the plan during the initial vote. Even though shareholders later ratified the package, the court’s ruling remains in effect.
Should Tesla relocate its corporate domicile to Texas, the company would sidestep Delaware’s jurisdiction, potentially nullifying the court’s decision on the pay plan.
Elon Musk’s ambition for humanoid robots
Elon Musk Aims for a $25 Trillion Tesla Valuation with Optimus Humanoid Robots
During Tesla’s 2024 annual shareholders meeting, CEO Elon Musk unveiled an ambitious vision: the introduction of the Optimus humanoid robot could propel the company’s market capitalization from its current $579 billion to a staggering $25 trillion. Though Musk refrained from setting a definitive launch date, he emphasized that the ambition stems from the robot’s integration into everyday tasks.
Optimus Demonstrated Household Capabilities
- Robots performed simple chores such as folding laundry during the presentation.
- Elon Musk asserted that, in time, Optimus will be capable of cooking meals and even teaching children.
- The company plans to begin limited production, with expectations of deploying over 1,000 units—and potentially a few thousand—by 2025.
Other Highlights of the Year
- The Cybertruck has entered mass production, with weekly output reaching a record high of 1,300 units.
- Tesla continues to expand its Supercharger network, facilitating seamless long‑haul journeys for its electric vehicles.
- Driverless car initiatives remain a core focus, with ongoing development and pilot testing underway.
A Historical Context
It’s worth noting that Tesla’s market value once peaked at over $1 trillion in October 2021, setting a benchmark for the electric‑vehicle sector. Musk’s current projection underscores the company’s intent to eclipse that milestone by leveraging cutting‑edge robotic technology.
Tesla underperforms the broad market
Tesla’s Stock Performance and First‑Quarter Results
Year‑to‑Date Decline
Over the course of 2024, Tesla’s shares have fallen by 26%. This substantial drop places the company well below the performance of the Magnificent Seven and the S&P 500, which has risen by 14% during the same period.
Quarterly Delivery Numbers
- Q1 deliveries: 368,810 vehicles
- Year‑over‑year change: ‑8.5%
Financial Performance
- Revenue: $21.3 billion
- Quarterly revenue change: ‑9% compared to last year’s Q1
Future Outlook
Elon Musk has highlighted the company’s goal of accelerating the mass production of affordable electric vehicle models. Following his announcement, Tesla’s shares experienced a 12% surge on that particular day, reflecting investor optimism about the strategy.
