Tesla Prepares for June 14 Shareholder Vote on Elon Musk's $56 Billion Pay Package

Jun 10, 2024, 11:21 AM

Tesla is gearing up for a crucial shareholder vote this week on CEO Elon Musk's controversial $56 billion pay package. The package, which has been a subject of intense debate, includes no salary, bonus, or stock compensation for Musk over a ten-year period unless he achieves significant value creation for Tesla shareholders. The pay package is structured in 12 tranches with specific market capitalization and operational milestones. Tesla Chairwoman Robyn Denholm has defended the package, citing the tremendous value Musk has created for the company over the past six years, amounting to over $735 billion. However, the package faces opposition from some major investors and proxy firms, with Bernstein predicting it is unlikely to pass. About 25% of eligible voting shares are held by passives who may follow the 'no' recommendation. If the package is rejected, there are concerns that Musk might leave the company, potentially causing Tesla's stock to drop. The final vote is set for June 14, and Tesla is also seeking support from small shareholders to back the deal.