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Politics: Tesla Shareholders To Vote On $56b Pay Package For

POLITICS: Tesla shareholders to vote on $56B pay package for Elon Musk – who could ‘go somewhere else’

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The post Tesla shareholders to vote on $56B pay package for Elon Musk – who could ‘go somewhere else’ first appeared on USSA News | The Tea Party’s Front Page.. Visit USSANews.com.

Whether or not Elon Musk stood to rise leaps and bounds over the nearest competitors for the world’s richest man remained “partly a popularity contest.”

Though Tesla shareholders had approved a $56 billion pay package in 2018, the potential for the tech billionaire to increase his wealth by more than a quarter remained in doubt since a judge’s January decision. Now, ahead of the June 13 annual meeting, shareholders are again having their say and NBC News reported, “It may be the highest-stakes popularity contest in history.”

With a mix of voting online or through a broker, owners of Tesla stock, be they individuals or large firms, have all been given the opportunity to sound off on the court-kiboshed performance-based arrangement that had been calculated off of the electric vehicle maker’s capitalization, profitability and revenue.

While the company’s value has climbed nearly ten-fold since 2018, growing from $59.1 billion to over $570 billion, Delaware Chancery Court Judge Kathaleen St. Jude McCormick ruled at the start of the year that the pay package would be invalidated.

“The concept of fairness calls for a holistic analysis that takes into consideration two basic issues: process and price,” she wrote. “The process leading to the approval of Musk’s compensation plan was deeply flawed. Musk had extensive ties with the persons tasked with negotiation on Tesla’s behalf.”

Little changed on that front as UCLA law professor James Park noted to NBC News, “It’ll be partly a popularity contest,” before adding, “but I think the shareholders will also do a hard-nosed rational calculus about whether it’s worth paying this sum to ensure he doesn’t go somewhere else.”

To his point, the outlet noted that Tesla had launched an ad campaign encouraging investors to agree to the 11-figure sum as the billionaire himself had indicated in seeking to increase his control of the company from 13% to 25% that if that goal weren’t met, he “would prefer to build products outside of Tesla.”

Countering those in support of the package, proxy advisor firm Glass Lewis told Bloomberg, “Mr. Musk’s slate of extraordinarily time-consuming projects unrelated to the Company was well-document before the 2018 grant, and only expanded with his high-profile purchase of the company now known as X.”

In addition to a vote that the court may yet find insufficient to justify the pay package, Musk also knocked Delaware’s judicial system and pushed for Tesla to reincorporate elsewhere after McCormick’s decision.

“I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters,” he posted.

As such, a Texas incorporation was also up for a shareholder vote which Glass Lewis argued offered “uncertain benefits and additional risk.”

“This just hasn’t been done before,” Tulane University law professor Ann Lipton told NBC News of the repeat vote on the $56 billion. “This idea of, after a trial, after a finding of a violation of fiduciary duty, to have a vote again — I’m unaware of anything like this happening before.”

While signaling support without endorsing a vote in favor, Reuters reported that a letter from investment firm T. Rowe Price stated in part, “The requirements of the 2018 package were extraordinarily ambitious — and they were delivered.”

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Author: Kevin Haggerty


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The post Tesla shareholders to vote on $56B pay package for Elon Musk – who could ‘go somewhere else’ first appeared on USSA News | The Tea Party’s Front Page.. Visit USSANews.com.



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