Elon Musk's Huge Compensation Package to Be Voted on Again by Tesla Shareholders
TapTechNews June 10th news, the huge compensation package (56 billion US dollars) of Tesla's chief executive Elon Musk is about to face another vote by Tesla's shareholders this week, and the situation seems to be in favor of Musk.
Musk tweeted on Saturday that approximately 90% of retail shareholders had voted in favor of his compensation package. According to Bloomberg, this is crucial because about 45% of the tradable non-insider-owned stocks are held by retail shareholders.
If Musk's statistics are accurate, then only about one-fifth of institutional shareholders need to vote in favor, and the compensation package can pass.
Institutional shareholders' votes in favor will not reach 90%. The California Public Employees' Retirement System (CalPERS) and the Norwegian Sovereign Wealth Fund will both vote against the compensation package, and proxy advisory firms ISS and GlassLewis also recommend voting against.
However, Musk has also received support from some institutional shareholders. For example, Baron Capital and ARK Invest have publicly expressed support for this plan. However, according to FactSet, none of these four institutions are among the top 15 institutional shareholders of Tesla's stock.
The compensation package granted Musk approximately 300 million incentive stock options and received more than 70% shareholder support and passed in 2018. However, a Delaware judge revoked the package in January this year on the grounds of insufficient information disclosed to Tesla investors. Tesla's board then resubmitted the package for a vote after providing new disclosure information.
When the options were granted in 2018, the estimated value was about 56 billion US dollars. Based on the current Tesla stock price, the value of these options is currently close to 50 billion US dollars (TapTechNews note: currently about 362.997 billion RMB).
In addition to stock options, Musk also directly holds approximately 411 million Tesla stocks, accounting for about 13% of the total currently outstanding shares.
If the package is rejected, Tesla's board will have to come up with a new way to compensate Musk, and Musk's reaction to this will be difficult to predict.
The final result of the 2024 compensation package is expected to be announced around the day of Tesla's annual general meeting on June 13 local time.
As of the opening of Monday, Tesla's stock price has fallen by about 29% so far this year, lagging behind the Nasdaq Composite Index by about 43 percentage points. In addition to Musk's compensation issue, the slowdown in electric vehicle sales growth has also led to a decrease in the delivery and profit expectations of this electric vehicle giant, affecting investor sentiment.