Stockholders - Tesla shareholders will once more decide on granting a stock package to Elon Musk.
Today, it's Crunch Time for Elon Musk of Tesla. Tesla's shareholders will gather for their annual meeting and vote on a $1 billion stock package for the 52-year-old boss.
The package was previously approved by an impressive 73% of shareholders back in 2018. However, in January, a judge in the US state of Delaware decided otherwise due to an investor lawsuit. He found that Musk had too much say in the matter, making it questionable whether the process was fair. Since shareholders were unaware of these connections, they couldn't make an informed decision.
The deal initially seemed promising, with an estimated value of around $56 billion. This big break would allow Musk to buy up to 300 million Tesla shares at a 2018 price if the company hit some major targets over a span of up to ten years. For instance, the stock market value would need to increase from around $50 billion to $650 billion. With a little help from Musk's leadership, Tesla reached that point and sailed past the $1 billion mark, making the package nearly $100 billion worth. But it seems the company has had a hard time maintaining that momentum, falling back to a current worth of $575 billion.
In preparation for the annual meeting, Tesla has drummed up support for the package from its board chair Robyn Denholm and others. Their argument? Turning down the deal would give Musk the opportunity to invest his time in other endeavors, such as his space company SpaceX or his online platform X. The pressure is on as this upcoming vote could serve as a referendum on Musk's leadership.
Recently, some shareholders have grumbled about Musk's divided attention, with most of his time seemingly spent on X and causing a fuss with his politically charged statements that align with the American right. Musk has hinted at wanting to control Tesla with 25% voting share instead of his current 13%.
Tesla is unclear if the package can just be reinstated with a shareholder vote after the court ruling. If the package receives a thumbs-up, it could help in any appeals against the judge's decision. In a different matter, shareholders are in agreement on relocating the headquarters from Delaware to Texas, where a major Tesla factory is located. Despite this move, it wouldn't impact the $1 billion package, which was already in play back in 2018.
