Elon Musk, the CEO of Tesla, has received significant support from the company’s shareholders, who approved Musk $56B package plan. This decision demonstrates the support that Musk enjoys from Tesla’s regular investors, even in the face of resistance from significant institutional investors and proxy firms.
Although Musk is pleased with his approved pay package, a lawsuit challenging the amount remains unresolved in a Delaware court. According to legal experts, this matter may take months to resolve. It is also possible that Musk will be sued again in court, so this still needs to be resolved.
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In addition, the shareholders reelected James Murdoch and Kimbal Musk to the board. They approved the company’s legal relocation to Texas. They enhanced investor control by approving plans to reduce board tenure to one year and to a simple majority vote on proposals.
Musk’s pay deal was approved to support his tenure and ensure Tesla’s continued success under his direction. Even though investors are worried about Musk’s attention to other projects and the company’s move to autonomous technology, they still believe in his vision.
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Musk gave a performance report on Tesla, highlighting plans for large-scale semi-truck production and a record shipment of 1,300 Cybertrucks in a week. After the meeting, Tesla’s stock closed 2.9% higher, despite a 55% decline in value from its 2021 peak.
The shareholder backing, according to CFRA Research analyst Garrett Nelson, “sends a strong message that Musk merits his incentive-based contract.” However, he also mentioned the possibility of a “sell the news” response in the wake of recent stock advances. The board used Musk’s accomplishment of all lofty market value, revenue, and profitability goals as justification for the compensation package.
