Stocks experience a significant surge. - Tesla shareholders greenlight Musk's billion-dollar pay package.
Shareholders have once again given the green light for a sizable stock package worth several billion dollars for Tesla CEO Elon Musk. The previously approved remuneration plan, which was invalidated by a US court in January, has been resurrected.
This latest approval doesn't necessarily guarantee that Musk will receive the stock package straight away. It simply ups his chances. Additionally, shareholders have voted for the company's registered headquarters to be relocated from Delaware to Texas, as announced during the annual meeting on Thursday.
A court in Delaware blocks a massive payout for Elon Musk
The initial vote in 2018 saw the stock package receive 73% approval. But a shareholder sued, and a Delaware judge ultimately blocked the plan.
The judge ruled that Musk held too much influence during the board meetings in 2018 when the massive compensation was being agreed upon, making the negotiations unfair. Shareholders were largely unaware of the discussions, so they had no real opportunity to make an informed decision, according to the judge.
Musk was awarded the right to receive approximately 300 million Tesla shares worth around $200 each in 2018, if the company fulfilled certain targets over a decade period.
Tesla still in court
One of these targets was for Tesla's market value to hit $650 billion. Considering this goal, the value of the package was originally estimated at around $56 billion. However, the stock market is volatile.
Following the growth and enthusiasm about electric cars at the time, Tesla reached this mark quickly, peaking at over $1 billion. As a result, Musk's compensation package was worth approximately $100 billion. However, demand has dropped significantly, and today, Tesla boasts a market value of just under $600 billion.
Musk hinted in recent months that he might direct his efforts towards designing AI apps elsewhere if he longer steered Tesla. This led to a fresh shareholder lawsuit in Delaware on Thursday.
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During the annual general meeting held in Delaware, shareholders voted to move Tesla's registered headquarters from Delaware to Texas, as announced by Elon Musk. Despite the previous court ruling that blocked Musk's billion-dollar pay package due to unfair negotiations, shareholders in the rain of money-filled Annual General Meeting have once again approved a significant stock package for Musk in Delaware.
