The pay package is just one of a series of measures on which shareholders have already been asked to vote by proxy ahead of Thursday’s meeting. Others include whether Tesla’s incorporation should move from Delaware to Texas, whether the company should soften its hardline stance on labor negotiations and whether the company should preemptively impose a moratorium on the use of minerals extracted from the seabed .
Yet none were as divisive as Musk’s payout. In the run-up to the elections, deep divisions among investors have come to light. Tesla Chairman Robyn Denholm has supported the pay package, as has billionaire investor Ron Baron. “Tesla is better with Elon,” Baron wrote in an open letter last week. “Tesla is Elon.” Still, opponents of the deal include two influential proxy advisory groups, which guide institutional investors in voting, as well as shareholders from the Nordic countries, where Tesla has clashed with workers over labor rights.
Norway’s trillion-dollar sovereign wealth fund has said it will vote against the wage deal, as will the country’s largest pension fund, KLP. “While we recognize that the business has grown significantly and successfully over the performance period, we still note that the total reward value remains excessive,” Kiran Aziz, KLP’s head of responsible investments, told WIRED, adding that the fund for the shares will vote. motion calling on Tesla to enter into labor negotiations. “Recent [dispute] between Tesla and the company’s employees in Sweden, as well as Tesla’s history of accusations of interference with workers’ rights are of great importance and show that the company needs to do better work in this area.”
There was intensive lobbying behind the scenes of the elections. Tesla paid for ads on Google and Musk-owned X, telling investors to “protect your investment” and support the proposal, according to a company filing with the Securities and Exchange Commission. In April, Tesla also launched a website urging shareholders to vote against the Delaware court ruling and support the pay package. “If the Court’s ruling is implemented, it means that Elon would not receive any compensation for its tremendous performance that has generated significant shareholder returns in less than six years,” the website said.
“This is the most advertising I can remember from any proxy filing,” said Robert Anderson, a professor at the University of Arkansas School of Law. He believes the Musk effect – the CEO’s ability to attract endless publicity – has contributed to this situation. But the pay package and the proposed move to Texas are both unprecedented in the business world, he added. “Or [of] those things in themselves would be pretty important even if he wasn’t a public figure.
The vote will be decided by a mix of institutional investors and an unusually large group of retail investors, who own about 44 percent of the company. There are concerns among shareholders that if Musk doesn’t get his compensation, “his attention may drift a little more to some of his other ventures,” Anderson said. Musk managed to juggle multiple ventures for years, but he has become more publicly distracted since acquiring the social media service Twitter and renaming it X. There, his visible turn to right-wing politics has gathered new fans and left some old ones behind.
Whatever happens this week, Tesla and Musk may look a little less superhuman. For years, the two have maintained that Tesla is a technology company, with Silicon Valley-style start-up sloppiness. “We need to be seen as an AI or robotics company,” Musk told investors – or voters – in April. “If you only value Tesla as a car company, this is fundamentally the wrong framework.”