June 23, 2024

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Should Elon Musk be paid $56 billion? Tesla shareholders get to vote

2 min read

It may be the highest-stakes popularity contest in history. 

Friends and foes of tech billionaire Elon Musk are in the middle of a two-month battle over whether to reinstate a record $56 billion pay package for the Tesla CEO, months after a Delaware state judge struck down his compensation as improperly awarded.

The fight is in the form of a shareholder vote: Nearly all owners of Tesla stock, including Wall Street firms and thousands of individual investors, are casting ballots for or against the pay package, voting mostly online ahead of the automaker’s June 13 annual meeting in Austin, Texas.

The question before shareholders: whether to bless a pay package that they originally approved in 2018 but that the Delaware judge deemed illegal under that state’s corporate laws.

The vote is unusual not only because of the fortune that Musk stands to gain — it’s 250 times larger than the median among Musk’s peers, according to the judge who voided it in January — but also because of the public and private jockeying on both sides of the pay vote.

Tesla has bought advertisements and launched a website to try to sway investors to vote for the package — tactics that experts say are unheard of in a debate about a corporate executive’s pay. Some Musk backers are also making online videos and reaching out to potential swing voters one on one, as if it were an election for public office.

But opponents of Musk’s compensation deal are getting organized, too. Several investors released a joint letter this month urging fellow shareholders to vote down the package as excessive.

The vote is a test of investors’ continued faith in Musk, who has become an increasingly polarizing public figure especially because of his extreme views, including on immigration and transgender issues. One of the world’s wealthiest people, he maintains a base of loyal fans.

James Park, a law professor at the University of California, Los Angeles, said investors are likely thinking about an array…

2024-05-27 10:58:00

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