Tesla shareholders vote to approve Elon Musk’s massive pay package


SAN FRANCISCO — After Tesla announced Thursday that shareholders had restored Elon Musk’s controversial, $50 billion pay package — solidifying his status as one of the world’s richest men — the crowd at the company’s annual shareholder meeting erupted in cheers and the elated CEO jumped onto the stage.

“Hot damn, I love you guys!” Musk said, as his fans chanted: “Elon! Elon!”

It was a decisive outcome after months of uncertainty for the electric-vehicle maker, as Musk threatened to pull back from the company amid uncertainty shortly before the pay package was invalidated by a Delaware judge earlier this year. The vote also suggested strong investor confidence in Musk, despite the company’s falling sales, mass layoffs and increased regulatory scrutiny.

After his victory was announced, Musk spent over an hour making bold claims about the future of his company, declaring that it’s about to embark on not just a “new chapter” but a “new book.”

“It’s actually conceivable, and it’s within the realm of possibility for Tesla to achieve a valuation 10 times that of the most valuable company today,” he said. “So when I say it’s like we’re starting a new book, it’s going to be the best book.”

A Delaware judge threw out the pay package, worth as much as $56 billion, earlier this year, arguing that the process that led to the deal had been unfair. As part of the deal, Musk was granted stock options as Tesla hit certain valuation milestones, accumulating massive amounts of shares that led to a record pay deal and played a hand in making Musk the richest person in the world.

Musk, in a Wednesday night post on his social media platform, X, said the measure passed by a “wide margin.” The final results were not immediately available Thursday.

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The shareholder vote does not immediately restore Musk’s pay, but it sends a strong signal that he has the broad support of Tesla’s investors. In a January post on X, Musk threatened to pull back from Tesla and build futuristic technology — such as robotics and artificial intelligence — “outside of Tesla,” before the invalidated pay package threatened to further erode his control. Such a future was a daunting prospect for the electric-vehicle maker, which reported a steeper-than-expected 55 percent plunge in profit for the first quarter.

Tesla’s stock jumped by about 6 percent after the market opened Thursday, adding about $30 billion in market value.

In the months leading up to the vote, investors large and small were split on whether to support the package. While some major shareholders criticized him as a distracted leader who doesn’t deserve such a reward, others lauded him for being a generational genius.

“Our answer is clear, loud and unequivocal: Tesla is better with Elon. Tesla is Elon,” said Ron Baron, a billionaire and investor in Tesla, who added that Musk was indispensable to Tesla and that his compensation must recognize that fact.

Investors and Musk’s supporters, including X CEO Linda Yaccarino, applauded the results late Wednesday. Musk — who would have remained among the richest people regardless of whether he kept the pay package — also pledged in a post Wednesday night that he would make Tesla the most valuable company on Earth.

Brad Lander, the New York City comptroller whose office owns about 3.4 million shares of Tesla and invests on behalf of public employees, said he voted against the package because of Tesla’s struggles and Musk’s divided attention among his several companies. Musk’s Wednesday night tweet announcing the outcome, Lander said, was “more evidence of the failure of corporate governance at Tesla.”

“This is not how the votes are supposed to be counted and made public,” he said. “If this unprecedented pay package is approved, as long-term investors in Tesla, we expect a CEO who is deeply committed to the company’s growth rather than other business ventures.”

Ross Gerber, a longtime investor in Tesla and a vocal critic of Musk, said the results of the vote are great for Musk but do not address the company’s current woes, including weak sales, global competition and mass layoffs.

“If they put as much effort into selling cars … that would help,” he said.

Musk and a Tesla spokesperson did not respond to requests for comment late Wednesday.

While several key investors were vocal about their position ahead of Thursday’s meeting, others stayed silent, leaving the result unclear until Musk’s X post late Wednesday. Tesla’s largest investors — Vanguard Group, BlackRock and State Street, which collectively own about 17 percent of Tesla stock — did not publicly state their positions. None responded to requests for comment.

After the decision from Delaware’s Court of Chancery in January, Musk also unleashed on the state where Tesla — and many businesses — are incorporated.

“Never incorporate your company in the state of Delaware,” he posted, before launching a poll and announcing a decision to hold a shareholder vote on incorporating in Texas instead. On Thursday, Tesla said shareholders passed that measure, too.

“This shows that shareholder votes can matter,” James Park, a professor at the UCLA School of Law who studies securities regulation and corporate law, said this week before the vote. “Sometimes they are just rubber-stamping what the board has proposed, but this is corporate democracy in action.”



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