Elon Musk has claimed Tesla shareholders are voting by a wide margin to approve a compensation package for him worth about $45bn (£35bn) in the run-up to the electric carmaker’s crunch annual general meeting later on Thursday.
The pay package, which is the highest ever awarded to the chief executive of a US company, is subject to an investor ballot after it was thrown out by a US judge earlier this year. Shareholders will also vote on Musk’s proposal to move the legal base of the electric carmaker to Texas.
A number of investors, including Norway’s sovereign wealth fund and the California State Teachers’ Retirement System, have already indicated they will reject the pay package. The proxy advisory firms Glass Lewis and Institutional Shareholder Services have also urged shareholders to oppose the award.
However, on Wednesday evening Musk suggested investors were voting in overwhelming numbers to approve the pay package, along with the move to Texas. He wrote on the social media platform X that: “Both Tesla shareholder resolutions are currently passing by wide margins! Thanks for your support!!”
The result of the vote will be announced at Tesla’s headquarters in Texas at 4.30pm ET (9.30pm UK time).
Under the pay plan, Musk had been eligible for as much as $55.8bn in stock options if Tesla hit certain milestones, which the company reached. However, after a decline in the share price the current value of those options is closer to $45bn.
Even if the pay package is approved, Musk is likely to face further hurdles, including the possibility of further litigation. Law experts said there were questions about whether the Delaware court that blocked the pay deal would accept the new vote, which is not legally binding, and allow the pay package to be reinstated.
The pay award was agreed by Tesla’s board in 2018 but a Tesla shareholder filed a lawsuit over the compensation. In January the Delaware judge Kathaleen McCormick ruled the Tesla board had inappropriately set the “historically unprecedented compensation plan” and questioned whether the size of the award was even necessary to retain Musk at Tesla.
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“Swept up by the rhetoric of ‘all upside’, or perhaps starry-eyed by Musk’s superstar appeal, the board never asked the $55.8bn question: was the plan even necessary for Tesla to retain Musk and achieve its goals?” McCormick wrote in her decision.
