Shareholders support Musk’s $56B pay package. Vote strengthens Tesla’s position in court

Tesla CEO Elon Musk announced on social media that shareholders are voting in favour of his controversial $56 billion pay package and relocating the company’s legal home to Texas. Musk shared on X that both resolutions are passing by wide margins.

The vote strengthens Tesla’s position in a Delaware court, where a judge previously voided the 2018 compensation package, citing board bias toward Musk. This outcome is seen as a victory for Musk and the board, despite opposition from major investors like Glass Lewis and Institutional Shareholder Services (ISS).

The results will be announced at Tesla’s Texas headquarters on Thursday. A source told Reuters that the preliminary vote count shows support from both institutional and retail investors. Shareholders also voted on relocating the company’s legal headquarters and re-electing board members Kimbal Musk and James Murdoch.

Musk’s compensation package, the largest in US corporate history, has faced criticism for being excessive. However, the board argued it is necessary to keep Musk focused on Tesla. Some large shareholders opposed the package, but Tesla has actively sought support from retail investors, highlighting Musk’s role in the company’s success.

The vote’s outcome is crucial for Musk’s future involvement in Tesla and could affect his plans to develop AI and robotics products outside the company. The board hopes the shareholder vote will strengthen its appeal against the Delaware ruling, which criticized the board for not fully informing shareholders before approving the 2018 pay package.