Tesla plans to use strong shareholder support for Elon Musk's pay package in Delaware court battle.

From Investing.com: 2024-06-14 16:25:51

Tesla will use Thursday’s strong support for Elon Musk’s $56 billion pay package to win over a Delaware judge who invalidated his 2018 agreement. Nearly three-quarters of shareholders voted in favor, preceding opposition from institutional investors. Musk and his brother Kimbal’s votes were excluded from the approval. Vanguard, Tesla’s largest shareholder, shifted its stance to support the deal. Tesla shares fell nearly 2% on Friday.

The legal fight to recognize Thursday’s vote might start soon. Tesla’s commitment to the 2018 deal was confirmed by the decisive vote, with Denholm stating that they plan to bring it back to the court in Delaware. The package was criticized by a Delaware judge in January as an “unfathomable sum” granted by a conflicted board.

Legal experts are divided on whether the new vote will impact the legal case going forward. The filing did not provide a breakdown based on the type of investor, but Musk was praised for his strong shareholder base. Some large investors oppose the pay package, arguing it will hurt existing shareholders and that the board lacks independence.

Some large investors urged the board to renegotiate Musk’s incentive plan to be less dilutive. Musk stated his preference for building AI and robotics products outside Tesla if he cannot get significant voting power. The proposal to move Tesla’s incorporation to Texas from Delaware received significant support. Directors James Murdoch and Kimbal Musk received re-election support below the U.S. corporate director average of 95%.



Read more at Investing.com: Tesla plans to leverage Elon Musk’s big pay win in Delaware court battle By Reuters