Tesla is asking shareholders to vote for a second time on Elon Musk's massive compensation package, after a Delaware judge struck down the first earlier this year on the grounds that the approval process was “deeply flawed.” .
In a proxy statement filed today, Tesla's board recommends that shareholders simply re-ratify the 2018 pay package to address concerns raised by the court ruling, rather than negotiating a new proposal with Musk that could end up costing Tesla. Tesla even more money.
“The Delaware Court questioned his decision”
“Because the Delaware Court questioned his decision, Elon has not received any payment for his work for Tesla over the past six years, which has helped generate significant growth and value for shareholders,” Robyn Denholm, president of Tesla's board of directors. , he wrote in the proxy statement. “That seems to us – and to many shareholders from whom we have already heard – fundamentally unfair and inconsistent with the will of the shareholders who voted in favor.”
The amount of money Musk will receive has been reduced to $47 billion, according to He New York Times, thanks to the decline in Tesla's stock price throughout the year. The company's shares are down 37 percent since the beginning of the year on news of fewer electric vehicle deliveries to customers and increased competition from China.
The shareholder who filed the lawsuit, Richard Tornetta, alleged that the board lacked independence from Musk in approving the compensation plan. The board included Musk's brother, Kimbal Musk, as well as his friends Antonio Gracias and Steve Jurvetson. (Jurvetson and Gracias have since left the Tesla board.) During the trial, Delaware Court of Chancery Judge Kathaleen McCormick He called this argument a “kill shot.”
After the judge voided the compensation package, twitter.com/elonmusk/status/1752455348106166598″>musk posted in x, “Never incorporate your business in the state of Delaware.” The vote to re-ratify will occur during Tesla's annual shareholder meeting on June 13. The company is also asking shareholders to approve moving Tesla's incorporation status to Texas from Delaware and to re-elect two board members, James Murdoch and Musk's brother Kimbal.
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