Elon Musk's huge pay package got yes

Tesla CEO's pay package is worth approximately NOK 600 billion.

Photograph: David Swanson/Reuters/NTB

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Tesla shareholders voted on the salary proposal at the electric car manufacturer's general meeting on Thursday evening.

Musk's massive pay package was worth about $56 billion in stock options when the company hit the necessary milestones. This equates to just under NOK 600 billion at today's exchange rate.

Tesla has fallen on the stock market since then. As of today, the value of stock options in the pay package is about $45 billion, or 480 billion Norwegian kroner, according to Bloomberg.

Read on E24+

Small shareholder says yes: Musk deserves the pay package

Earlier on Thursday, Musk claimed in a message on X that the salary package, as well as the proposal to move Tesla's official affiliation from Delaware to Texas, would likely pass by a good margin.

Tesla shares rose on Wall Street after that.

Move to Texas

Tesla shareholders also voted to move the company's affiliation from Delaware to Texas.

Tesla CEO Musk floated the idea of such a move earlier this year, after a Delaware judge rejected the pay package approved by Tesla shareholders in 2018.

The company's headquarters and one of its factories are located in Austin, Texas.

The small state of Delaware is famous for being the state where many of America's largest companies are officially registered. This has to do with Delaware's long history of specialized commercial courts, as well as its reputation as a business-friendly state.

Texas earlier this year also created a business court, the Business Courts of Texas, to compete with Delaware.

These proposals are being considered at Tesla's general meeting

Tesla has asked shareholders to vote in favor of Musk's pay package, which should total $56 billion (just under 600 billion kroner). The company's board of directors believes that Musk has achieved the owners' goals and achieved strong results for the company.

Tesla also asked shareholders to vote to move the company from Delaware to Texas.

Several shareholder proposals were submitted to the General Assembly. Tesla's board recommends rejecting them all.

One of these proposals, Proposition Nine, concerns having company guidelines on the right to organize and collective wage negotiations. The proposal notes that the company should not interfere with or pressure employees who try to form or join a labor union.

“Tesla’s guidance lacks clarity on this point,” the motion submitted to the public meeting says. Tesla's board of directors says the proposal would not serve the interests of Tesla or its owners, because the company is already committed to protecting workers' rights.

Another suggestion to shareholders is that Tesla should refrain from using minerals mined from the seabed, like BMW, Volvo, Volkswagen, Rivian and Renault. Norway has recently taken several steps to begin this dilution of seafloor minerals.

In addition, the owners must, among other things, decide on shareholder proposals that directors should be re-elected every year, and that votes in the company be determined by a simple majority.

The oil fund said no

At the weekend, it became clear that the Norwegian Oil Fund would vote against Musk's pay package. box It owns about one percent of TeslaIt owns about one percent of TeslaThe oil fund itself states that it had a 0.98 percent stake in Tesla at the end of 2023..

“We believe the salary package is disproportionately high, with significant dilution to shareholders, and has the wrong structure in relation to the purpose of pay,” wrote Karen Smith Iheanacho, director of ownership and compliance at the oil fund. In a column in E24 on Saturday.

She continued: “We have had a good dialogue with Tesla, including the Chairman of the Board, on these and other matters,” and stressed that the dialogue will continue regardless of the outcome of the general meeting.

Musk himself has criticized the Oil Fund's unwillingness to support the wage proposal.

“This is not good,” he wrote on X earlier this week.

I've tried before

This isn't the first time such a package for Musk has been on Tesla's agenda.

In 2018, Tesla owners adopted a similar salary package for Musk, where he was given the right to buy shares at favorable prices if the company reached certain operational and financial goals. The oil fund also voted against the salary agreement in 2018.

However, the agreement was halted by a judge in Delaware, where Tesla is registered, in January this year.

Even if the salary package is reapproved now, it does not automatically pave the way for Musk to be granted stock options. This was reported by many media outlets, including: Bloomberg, Financial Times And The New York Times, who spoke to experts in the relevant law. Tesla itself has also admitted that it is unclear what kind of significance the approval will have from a legal standpoint.

Elon Musk is considered one of the richest people in the world. He currently ranks third on the Bloomberg Billionaires Index, bettered only by Amazon CEO Jeff Bezos and Bernard Arnault, head of luxury conglomerate LVMH.

In addition to leading Tesla, Musk is CEO of space company SpaceX and owner of X (formerly Twitter).

Read on E24+