Tesla shareholders have once again approved a huge stock package worth tens of billions of dollars for company boss Elon Musk. The compensation plan, originally approved in 2018, was overturned by a US court in January.
The new vote does not mean that Musk will automatically receive the share package. But it increases his chances of that. Shareholders also voted to move Tesla’s registered office from the US state of Delaware to Texas, the company announced on Thursday during its annual general meeting.
First vote overturned by court
During the first vote in 2018, the share package received a majority of 73 percent. But then a shareholder filed a lawsuit, and a Delaware judge ultimately torpedoed the plan.
She concluded that Musk had too much influence in the background during the negotiations for generous compensation on Tesla’s board of directors to be able to speak of a fair trial. Because the shareholders were left in the dark about the involvement, they had no opportunity to make an informed decision, the judge said.
Pieces of Tesla stock
At the time, Musk was entitled to receive a share of 300 million Tesla shares at the 2018 price if the company met a number of ambitious targets over a period of up to ten years.
The market value should, among other things, increase from more than $50 billion to $650 billion. Based on this goal, the value of the package was once estimated at approximately $56 billion. But stock prices fluctuate.
The euphoria about electric cars led to rapid growth
After rapid growth and thanks to the euphoria about electric cars at the time, Tesla quickly reached the milestone and was sometimes even worth more than a trillion dollars – and Musk’s compensation package amounted to around 100 billion dollars. Demand has now noticeably cooled and Tesla still has about $580 billion in the stock market.
In recent months, Musk has promised that he could advance the development of artificial intelligence applications elsewhere if he does not gain more control of Tesla. That led to a new investor lawsuit in Delaware on Thursday.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
