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Elon Musk received 72% of the Tesla shareholder vote on pay

Elon Musk received 72% of the Tesla shareholder vote on pay

Tesla shareholders have decisively backed proposals to confirm Elon Musk’s multi-billion dollar pay package, according to the British Daily Mail. Voting details were released on Friday.

The proposals were announced to be approved at Tesla’s annual shareholder meeting on Thursday, without the underlying totals. In the end, about 72% of voting shares supported the pay package, excluding shares owned by Mr. Musk and his brother Kimbal.

For months, many Tesla investors have been concerned about the extent of Elon Musk’s involvement in running the electric car company, after a judge in Delaware invalidated his salary package.

The compensation plan requires Mr. Musk to hold shares for at least five years before selling them, and the value of the package will continue to fluctuate before he can do so. At Thursday’s closing price, the shares are worth about $48 billion.

In his address to shareholders after the vote, Mr. Musk pledged that he was committed to Tesla. The salary package “isn’t actually cash, and I can’t run away, nor do I want to,” he said.

Tesla stock fell about 2% in early trading on Friday, reversing some of the gains made the day before, when Mr. Musk said a vote on wages was scheduled to be approved before official results were announced. Legions of Musk’s online supporters celebrated the vote and analysts revised their reports on Tesla’s prospects.

Vanguard, whose 7% stake in Tesla makes it the company’s second-largest shareholder after Mr. Musk, voted in favor of the pay award despite voting against it in 2018. In a note In explaining the opposite, Vanguard said that although it was concerned about the size of the package, “the unique circumstances of the plan’s retrospective evaluation eliminated our concerns.”

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The result was “a vote of confidence in Elon,” analysts at Bernstein wrote in a note after the result. “While there remains some uncertainty about the legal process and next steps, the vote by this standard was a clear endorsement, alleviating concerns that Elon might leave the company or direct more of his energy elsewhere.”

Tesla’s board hopes that a second confirmation of the wage award, originally approved in 2018, can convince a Delaware court to overturn its ruling. The judge in the case said the award was excessive and was dictated by Mr Musk to a board of directors to whom he had personal ties.

“We believe the certification vote that Elon demanded and forced was deeply flawed from a legal standpoint, legally ineffective and does not impact our case,” said Greg Varallo, a lawyer for frustrated Tesla shareholders who have challenged Musk’s pay in court. a permit.

With the pay package, Mr. Musk will own 20.5% of Tesla, up from about 13%. Mr. Musk has said he would like a 25 percent stake, noting in January that this would be “enough for me to be influential, but not enough to keep me from being ousted.” He said that if he doesn’t get a share of that size, he “would rather build products outside of Tesla.”

Even after this week’s rise, Tesla stock has fallen more than 20 percent this year, versus a 14 percent gain in the broader stock market. The company remains by far the most valuable auto company, worth about $600 billion, but concerns about intense competition and weak demand for its models have weighed on the stock.

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At a shareholder meeting on Thursday, Mr. Musk was characteristically bullish on Tesla’s self-driving technology, including a promised fleet of robotaxis, and said the company’s humanoid robot, called Optimus, would grow into a multibillion-dollar private business venture.

Market analysts are divided on where Tesla goes from here, with about 40% rating the stock as a “buy,” 20% as a “sell” and the rest as a “hold,” according to FactSet. The price forecast range is wide, averaging around where the stock is trading now.

Bernstein’s price target implies a 30 percent decline, and analysts rate the stock as “underperform.” Others are more optimistic: Analysts at Wedbush believe the stock could rise 50 percent from here, and rate it an “outperform.” The result of the pay vote was a “bubbly moment,” they wrote. “Tesla is Musk and Musk is Tesla.”

Peter Ives, Jack Ewing And Michael J. de la Merced Contributed to reports.