Elon Musk gets his way: $56 billion and moving to Texas

A  majority of Tesla shareholders voted Thursday in Austin (Texas) to ratify CEO Elon Musk’s 2018 pay package worth $56 billion in stock after a Delaware judge rescinded that in January. They also approved moving Tesla’s incorporation site from Delaware to Texas, home to the automaker’s largest US factory. A move initiated in reply to that judgment.

“Damn, I love you guys,” Elon Musk said as he took the stage, all smiling. “Tesla is better with Elon. Tesla is Elon,” said Ron Baron, head of Baron Funds, which has invested around $3 billion in Tesla shares. “Elon has fulfilled his remuneration contract. Elon earned his salary.”

Preventing Musk from leaving

The shareholders wanted to prevent Elon Musk from withdrawing from Tesla to concentrate on his other businesses, like Space X, xAI, Starlink, or Neuralink. Musk pleaded in a video with the help of its humanoid robot Optimus to vote ‘yes’. “Your vote is crucial for the future growth and success of Tesla and for the value of your investment,” he said.

Some major shareholders had announced that they would vote against the gigantic bonus. The CalSTRS pension fund for California civil servants and the Norwegian NBIM sovereign wealth fund, among others, consider the remuneration excessive and are critical of Musk’s oversight of the board of directors. That board includes Musk’s brother Kimbal and James Murdoch, son of media mogul Rupert Murdoch.

Delaware judge Kathaleen McCormick ruled in favor of the small shareholder who initiated the complaint, saying that Tesla’s board members lacked independence from him, failed to negotiate with him, and didn’t give shareholders the full picture before asking them to vote on his bonus plan. The shareholders’ votes can’t undo the Delaware judge’s verdict but will give Elon Musk more ammunition to fight it in appeal.