Tesla is due to hold another shareholder vote over Elon Musk’s pay package, following a Delaware court’s nullification of the 2018 agreement that would have seen Musk awarded €52.6 billion ($56 billion). This information was disclosed in a document released on Wednesday ahead of Tesla’s annual general meeting set to take place in June. The automaker further revealed it is to solicit a vote on transferring its domicile from Delaware to Texas.
Robyn Denholm, the Tesla chairwoman, expressed criticism of the Delaware Chancery Court’s January verdict, suggesting in the proxy that the decision was a challenge to the outcomes of previous shareholder votes that had endorsed Musk’s remuneration package.
Chief Judge Kathaleen St. J. McCormick characterised the board of directors as excessively submissive, failing to act in the best interests of investors.
In her proxy, Denholm highlights that Musk hasn’t been paid for his significant contributions to Tesla over the past six years due to the court’s decision, arguing that these efforts have led to substantial growth and value for stockholders. In her opinion, the issue is about essential fairness and respect toward the CEO.
A shareholder who previously brought a lawsuit against Tesla over Musk’s pay dismissed it as being exorbitantly high and non-transparent.
Musk, serving as CEO for six different firms, noted earlier this year his preference to engage in artificial intelligence and robotics projects elsewhere unless he possessed a 25% stake in Tesla. Currently, Musk holds approximately 13% ownership of the company.
Following this news, Tesla’s stocks recorded a 1.1% increase by 7 am, New York time, prior to the commencement of regular trading. However, the shares had previously seen a 37% decline this year up until Tuesday’s market close.