Elon Musk takes victory lap after 77% of Tesla shareholders vote back his $56 billion salary

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Tesla revealed Friday that chief Elon Musk had won an emphatic victory in shareholder votes on his $56 billion pay package and a proposal to move the company’s headquarters from Delaware to Texas.

Musk’s stock options package – the largest in US history – was reapproved Thursday by 77 percent of votes cast at Tesla’s annual meeting in Austin, a filing with the regulator showed. Excluding the shares of Musk and his brother Kimbal, this figure was 72 percent.

The plan to resettle in Texas received the support of 63 percent of the votes cast. The margins of victory surprised even those within the company. Chairman Robyn Denholm had likened the task to climbing “Mount Everest” during a hectic months-long campaign.

The results are a significant boost for Musk as he tries to reassert control over Tesla. The votes became a referendum on his erratic leadership, especially his plans to recast Tesla as an artificial intelligence and robotics company.

The reaffirmation of his compensation will also strengthen the company’s position as it seeks to reverse a January decision by a Delaware court to annul the 2018 stock option package over concerns about its value and independence. management.

Musk chose not to be magnanimous in victory. Early Friday morning he posted on X a photo of a cake he wanted to send to Delaware as a “farewell gift.” It was decorated with the words “Vox Populi, Vox Dei” in enamel, meaning “the voice of the people is the voice of God.”

While the vote does not replace the court’s decision, ratification could play an important role in convincing the judge to reverse or change her position. Musk’s grip on the company would be strengthened, increasing the CEO’s stake from its current 13 percent to more than 20 percent.

The day before, as polls closed in Austin at 4 p.m., Musk appeared on stage to address a rapturous crowd that chanted his name and jumped up and down in celebration in front of a blue and pink neon sign in the shape of Texas.

“Damn, I love you guys,” he told the audience of carefully selected private investors. “We have the greatest shareholder base of any publicly traded company. . . We are not just opening a new chapter for Tesla, we are starting a new book.”

The jubilant CEO joked, noting during his speech, “What do you know, it’s 4:20 p.m.,” harking back to a 2018 tweet about taking Tesla private at $420 per share. Many interpreted the price as a reference to 4/20; April 20 is a day celebrated by marijuana smokers.

Tesla quickly decided to leave the state. On Friday, Denholm said in a letter to shareholders that she had already filed the paperwork to reincorporate in Texas. The chairman added that the “decisive approval by our shareholders confirms our commitment to the [pay] deal” and “we plan to take it back to court in Delaware to ensure that your votes… . . be heard”.

The next stage of the saga is a hearing in Delaware early next month, when the judge, Kathaleen McCormick, will consider a $5.2 billion fee request filed by the lawyers who successfully overturned the pay package. After her ruling, Tesla can appeal the wage decision to the Delaware Supreme Court.

Greg Varallo, lead attorney for the plaintiff, said: “We believe that the ratification vote that Elon demanded and forced is deeply flawed as a matter of law, legally ineffective and has no bearing on our case. We will respond to any arguments in due course.”

The key to Tesla’s election success was convincing Vanguard, its largest shareholder with a 7.3 percent stake, to reverse its position on pay after opposing it in 2018.

While Vanguard admitted that the stock award was a “substantial outlier” relative to all other stock awards in the company’s history, he said that “the unique circumstance of the plan’s review retroactively allayed our concerns.”

The $9.3 trillion asset manager said it had changed its position after meeting with Musk and Tesla executives. It concluded that “the strong alignment of executive compensation with shareholder returns since 2018 and the benefits the board claimed regarding the motivational value to the CEO of retaining the original deal” were sufficient to justify the shift.

BlackRock, the second largest, also supported both resolutions. BlackRock declined to comment.

Additional reporting by Will Schmitt and Patrick Temple-West in New York