Tesla Shareholders Set to Approve $1 Trillion Pay Package for Musk

UPDATE: Tesla shareholders are on the brink of a historic decision that could grant Elon Musk the largest CEO pay package ever, potentially worth up to $1 trillion. The vote is scheduled for Thursday, July 20, 2023, in Austin, Texas, and it promises to reshape the future of the electric vehicle giant.

This monumental vote comes as Musk aims to solidify his leadership role amid ambitious goals for Tesla’s growth. If approved, the pay structure could elevate Musk’s ownership stake from 15% to 25%, granting him unprecedented control over a company that is already valued at approximately $1.5 trillion. Proponents assert that this package is essential for Tesla to achieve its lofty targets, including selling 20 million cars and launching a fleet of one million robotaxis within the next decade.

Board chair Robyn Denholm described the vote as an “inflection point” for Tesla, emphasizing that failure to pass the package could drive Musk to reconsider his commitment to the company. She warned investors of potential losses if he were to leave, stating it could “cost Tesla significant value.” Longtime analyst Dan Ives echoed this sentiment, labeling Musk as the company’s “biggest asset” and marking this vote as critical amidst the ongoing “AI Revolution.”

Musk’s ambitious vision includes not just robotaxis but also humanoid robots, which he claims will transform the landscape of the automotive and tech industries. However, critics point to a series of delays and unmet promises surrounding these innovations. Earlier this year, Musk stated that the first dedicated robotaxi would be operational, yet many of these promises have remained unfulfilled.

Opposition to the pay package has emerged, notably from Norway’s $1.6 trillion wealth fund, which labeled the proposal as “excessive in size” and warned it could dilute shareholder value. Proxy advisors ISS and Glass Lewis have also raised concerns, arguing that the plan could transfer “an unprecedented amount of wealth” to Musk without adequate oversight.

Despite the dissent, the Tesla board appears to be aligned with Musk’s vision. Critics argue that the governance structure effectively places Musk in a position of unchecked power, as evidenced by the prior $56 billion pay package that was deemed “deeply flawed” by a Delaware judge earlier this year.

As the vote approaches, analysts and investors are keenly watching how this decision will impact Tesla’s governance and future direction. If passed, the pay package will not only set a new benchmark for executive compensation but will also reinforce Musk’s dominance over the company he has built.

Challenges to the vote are expected to be limited due to the recent relocation of Tesla to Texas, where new bylaws make shareholder lawsuits more difficult. This move has drawn scrutiny, as it appears designed to insulate Musk’s control while minimizing dissent from investors.

The outcome of Thursday’s vote will not only determine Musk’s pay but also signal the degree of control he will wield over Tesla moving forward. As the company prepares for what could be a major shift in its governance model, it remains to be seen what Musk intends to build with this newfound power.

Stay tuned for more updates as this story develops, and make sure to share this urgent news!