A Trillion-Dollar-Plus Sovereign Wealth Fund Has Just Joined The Growing Chorus Against Elon Musk’s $56 Billion Pay Package
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With Tesla's institutional investors appearing increasingly disconcerted with Elon Musk's $56 billion pay package, and the EV giant's CEO threatening to quit the company should he fail to win the requisite shareholder approval for his preferred remuneration, the stakes could not be any higher for Tesla's upcoming Annual General Meeting (AGM).
The Brouhaha Around Elon Musk's Gigantic Pay Package
Back in 2018, Tesla awarded Elon Musk one of the biggest compensation packages in American corporate history, to the tune of $56 billion. The package played a pivotal role in allowing Elon Musk to clinch the title of the world's richest person.
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Tesla underwent a trial in 2022, where some shareholders asserted that the Delaware Court of Chancery should void Elon Musk's 2018 compensation plan as it was a result of sham negotiations between a beholden board and an increasingly powerful and assertive CEO.
Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick ultimately agreed with the plaintiffs and voided Elon Musk's $56 billion compensation plan. The punitive action also voided Elon Musk's 304 million unexercised stock options, which had entitled the EV giant's CEO to around 9 percent of Tesla's 3.2 billion outstanding common shares. Bear in mind that Musk currently owns roughly 13 percent of Tesla, corresponding to around 412 million shares.
Elon Musk responded by recommending to the board to shift Tesla's state of incorporation to Texas. Bear in mind that Musk had already declared before the Delaware court's ruling that he was uncomfortable working at Tesla with his current voting power, complaining that his control was just enough to allow him to be "influential" but not sufficient to prevent being "overturned"
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