Tesla shareholders back Elon Musk's compensation plan
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Tesla CEO Elon Musk. Photo: Krisztian Bocsi/Bloomberg via Getty Images
Tesla shareholders endorsed Elon Musk's compensation plan in a vote that could pave the way for him to get back the $56 billion pay package he had temporarily lost.
Why it matters: A Delaware judge ruled in January that Tesla's board had not properly constructed or disclosed the details of the CEO's pay deal when it was initiated in 2018.
Driving the news: Shareholder votes supported both Musk's compensation and his plan to reincorporate the company in Texas in a move away from Delaware, Tesla general counsel Brandon Ehrhart said at the meeting Thursday afternoon.
- Ehrhart did not reveal the exact vote totals.
- Musk celebrated the victory by leaping into the air and throwing his hands into the air multiple times: "Hot damn, I love you guys," he said.
Zoom in: After a recent decline in Tesla's stock price, the pay package is now worth about $44.9 billion, according to the AP.
- Musk is currently the world's richest person, just ahead of Amazon founder Jeff Bezos, according to Forbes estimates.
The intrigue: Musk rallied retail investors to his side, helping the company overcome "no" votes from the likes of the California Public Employees' Retirement System and the New York City comptroller.
- Third-party stock advisory firms Institutional Shareholder Services and Glass Lewis also recommended that stockholders vote no.
What they're saying: "It is a pop the champagne moment for Musk and Tesla shareholders," Wedbush Securities analyst Dan Ives wrote in a research note, estimating that the end of "this Twilight Zone soap opera" removes a $20 to $25 overhang on the stock.
Yes, but: The vote on Musk's pay isn't binding.
- Delaware Chancery Court Chancellor Kathaleen McCormick will decide whether to allow the plan to be reimplemented, though the shareholder endorsement may ease her concerns.
What's next: The ball is back in the court of McCormick, who previously ripped Tesla's board for allowing Musk to dominate the process of designing his own compensation.
