Tesla is once again pushing forward with plans to grant its CEO, Elon Musk, the largest pay package in corporate American history, valued at USD $56 billion.
The electric vehicle (EV) company is seeking shareholder approval for the unprecedented compensation scheme initially proposed in 2018.
This move follows a rejection of the deal by a US judge earlier this year, who criticised the staggering sum as ‘unfathomable.’
The renewed proposal emerges amidst Musk’s recent announcement of intentions to reduce Tesla’s global workforce by more than 10%, citing operational necessity in a memo to employees.
The proposed compensation package for Musk does not include a traditional salary or bonus but instead offers rewards contingent on Tesla’s market value reaching up to $650 billion over a decade. Currently valued at $500.36 billion, Tesla’s stock performance is a key determinant of Musk’s potential compensation.
The 2018 pay deal faced legal challenges, with a Delaware-based judge ruling it unfair to shareholders. The judge highlighted concerns that Tesla directors, possibly swayed by Musk’s ‘superstar appeal,’ did not adequately inform shareholders during negotiations. Musk was reportedly outraged at the ruling, even threatening to relocate Tesla’s headquarters from Delaware to Texas.
Tesla’s recent filing seeks shareholder approval for the relocation and a reevaluation of the 2018 pay package. Board chair Robyn Denholm defended Musk’s compensation, saying he had not received any salary from Tesla for the past six years. Denholm also disputed the court’s ruling claiming that it did not align with ‘corporate law principles’.
While Musk’s compensation for 2023 remained at $0, as disclosed in the filing, he is compensated through stock options rather than a salary. Tesla plans to appeal the court’s decision while suggesting a new shareholder vote on the original 2018 pay package.
The proposed re-vote coincides with a challenging period for Tesla, marked by sluggish EV deliveries.
A board of directors can pay its CEO whatever it wants. If shareholders are upset or aggrieved, there are a number of legal options available to them. The fact is that none of the shareholders were bothered by Musk’s remuneration package.
The judge who works for the Biden DOJ clearly had a political axe to grind. Elon needs to be punished for allowing Twitter to engage in free (well, free-er) speech, and especially for telling globohomo to “go f*ck yourselves” on the world stage. That’s all that this is.
No court cared when the CIA’s pet lizard Zuckerberg was coining billions, or when a politically connected hedgefund manager named Jeff Bezos left Wall Street to start an “online book store” that mysteriously grew into one of the biggest companies in the world while all its largest competitors were systematically driven out of business by biased legal rulings, forced buyouts and various other forms of market manipulation.
Crime pays so long as you’re on the right team.