Automoile - Tesla stockholders bestow additional substantial shares upon Musk.
Tesla shareholders have given their approval for a massive stock package valued at several billion dollars for CEO Elon Musk. This was a reinstatement of a previously approved compensation plan that had been invalidated by a US court in January.
This demonstrates that a large percentage of Tesla shareholders still trust Musk, despite criticisms over his unpredictable behavior, controversial political statements, and focus on other companies such as the online platform X.
Although this recent vote does not automatically grant Musk the stock package, it does improve his chances in the ongoing legal dispute.
The CEO's Relationship with the Board
The first vote in 2018 saw the stock package receiving 73% approval, but a shareholder lawsuit led to the plan being overturned in court. A judge in Delaware found that Musk had close relationships with members of the Tesla board and that shareholders were not informed about these connections before the first vote. This breached the rules for an informed decision.
Despite this information being made public through the lawsuit, shareholders still approved the package. Tesla can now use this evidence in court.
Shareholders also supported the relocation of Tesla's headquarters from Delaware to Texas, as the company had announced at the annual meeting. Musk had proposed the move following the judge's ruling. The main headquarters had already been moved from Palo Alto in Silicon Valley to Austin, Texas, several years earlier.
300 Million Shares for Musk
The compensation plan granted Musk the right to purchase up to 300 million Tesla shares over time at the 2018 price, subject to the company meeting specific targets within a ten-year time frame.
The targets included Tesla's stock market value increasing from $50 billion to $650 billion. Based on this target, the potential value of the package was estimated to be around $56 billion.
Tesla quickly reached this target and was even worth over $1 billion at one point – causing Musk's compensation package to reach around $100 billion. However, growth has since slowed, and Tesla's current market value stands at around $580 billion.
Further Shareholder Lawsuit at the Annual Meeting
Musk had previously expressed his desire to control more of Tesla by increasing his stake to around 25%. This led some shareholders to file a new lawsuit in Delaware, alleging that Musk was weakening Tesla by diverting AI resources to his other companies.
He currently holds approximately 13% of the voting rights, and the 2018 package would bring his share to around one-fifth. Musk has hinted that he expects to receive more stock options in the future.
$30 trillion market capitalization?
Following the vote, Musk took the opportunity to address shareholders on stage at Tesla's annual shareholder meeting in Austin. He presented his vision of Tesla becoming much more valuable, sharing that he believes the company will be worth ten times more in five years than it is today.
Even more astounding, Musk suggested that Tesla could ultimately be worth ten times more than the most valuable company in the world today, implying a potential market value of around $30 trillion. Microsoft and Apple are currently in a race for the number one spot at $3.28 trillion.
The Future: A Robot-Dominated World
Musk did not specify a time frame for this incredible value increase, but he did reveal his vision of a future where there will be more robots than people on Earth. He estimates the number of robots could be up to 10 billion, 20, or even 30. Tesla will be a significant producer of these robots.
Musk also disclosed that more than 1,000 of Tesla's humanoid robots named Optimus could be working in Tesla factories as soon as next year. At present, there are two Optimus robots in the Fremont factory, packing battery cells.
In addition to his grand visions for the future, Musk informed shareholders that "in the past few months," two individuals had attempted to harm him. This prompted him to stop giving autographs.
