Shareholders approve Musk's 477.5 billion salary package – NRK Urix – Foreign News and Documentaries

revision:

In an earlier version of the case, NRK wrote that NOK 477 billion would be paid to Musk. The right thing is to have options. Options are something that gives him the opportunity to buy Tesla shares at the price that was previously agreed upon.

At 23.10 pm Thursday, it became clear that shareholders had approved Musk's salary package of NOK 477 billion.

It is one of the issues that Tesla shareholders voted on during the company's general meeting. Legal relocation from Delaware to Texas was also approved.

The main character himself took to the stage a few minutes after the results came out on Monday evening, Norwegian time. There he praised the shareholders who had just approved his salary package.

– amazing. I love you diving. “We have the most amazing shareholder base,” Musk said.

The Norwegian Oil Fund had announced that it would vote to reject the salary cap, because it believed it was disproportionately large.

– Does he need 500 billion?

Norwegian pension fund Oljefondet is Tesla's eighth-largest owner.

They voted against giving Musk this giant salary, because they believe it takes away too much of their value as owners.

This Musk salary package takes executive salaries to historic, or should I say astronomical, new heights. We voted against because we believe it is not in the best interest of shareholders to make such large transfers of value from owners and manager.

This is according to Karen Smith Iheanacho, property manager at the oil fund.

Musk stopped following oil fund manager Nikolai Tangen after it became known that the oil fund voted no. But the oil fund is not afraid to offend the world's richest man, says Iheanacho.

– When we vote on salary packages and we vote in general, we do so according to clear guidelines and regardless of what an individual leader thinks about it, and completely regardless of Elon Musk's reaction.

She adds that they are “very happy with the increase in value that has occurred at Tesla under Elon Musk's leadership.”

-It was so wonderful. But does it need NOK 500 billion to create these values? We don't think so.

One of those who completely disagree is businessman and billionaire Christian Ringnes.

-Does he mean this?

– Yes, of course. So, it's not a salary in that sense. He gets the right to buy the shares at a cheap price, and this price is very high, much higher than when this agreement was concluded. He had given up his entire salary for many years, and this was the package he was supposed to get. Ringnes says no one actually thought this package would be successful.

He asserts that Musk has created tremendous value for Tesla shareholders.

-He deserves everything he gets. “This is the guy who changes the world,” Ringnes says.

The case was also brought before the judiciary in the United States of America once. There will likely be several rounds.

Lawsuit and trial

It all started in 2018. Then the general meeting at Tesla approved a salary package for Musk.

Reuters Describe the package like this: Musk was to receive shares worth about 1 percent of Tesla stock each time he achieved one of several goals set by the company.

Contributor Richard Tornetta didn't like it. He thought it was unfair for Musk to get that kind of money.

Therefore, he filed a lawsuit against Musk and several other managers at Tesla.

For a while, the supposed value of the package was about 56 billion US dollars, or 594 billion Norwegian kroner, according to the news agency.

The package is now worth “only” $45 billion, or about 477 billion Norwegian kroner, according to Reuters. The New York Times.

Tesla's General Assembly approved the package in 2018. However, Musk did not receive any money, so the case is still pending in the courts of the state of Delaware, USA.

And there the judge put his foot down.

Judge Kathleen McCormick declared the wage freeze invalid. It believed the amount was “unfathomable” and unfair to shareholders.

I also thought Musk had largely set the terms of the package himself, because the board consisted of, among other things, his brother and close friends. The New York Times.

Another try

But the battle is not over yet, because the ruling is still in place.

Now the General Assembly has also voted on the proposal again. This time it was expected to be very crowded.

Several shareholders have made their position known, including the oil fund. They voted against, which they did in 2018.

Storebrand has also decided to do so, says portfolio manager Ivar Harstveit at the Delphi Fund.

– He says there should be a limit to how comprehensive salary packages can be, but he also stresses He believes it is right to pay key employees for their efforts.

He described the amount as unusually high, even for the United States.

The salary level of top managers in the United States is already much higher than that of Norwegian top managers. That number is rapidly multiplying 100 times again, so we're talking huge sums, Harstveit says.

– Must be examined by the Ethics Committee

Professor of financial economics, Björn Espen Ekbo, strongly disagrees with the oil fund's indication that they will vote no.

– Then they do not follow up on the contract that they themselves participated in concluding. As a shareholder, you, along with all other shareholders, are responsible for footing the bill. Then, when you're clearly giving birth, you shouldn't try not to push, he tells NRK.

Ekpo believes that rejecting the oil fund is unethical.

– I believe that the moral basis of this decision is so bad that it should be investigated by the Ethics Committee of Parliament, whose task is to evaluate the ethics of the behavior of the oil fund, says the professor.

The fund has spent years building a good reputation. With the stroke of a pen, you can actually destroy such a reputation, he adds.

It is not unreasonable

The professor does not think it is unreasonable for Musk to receive the $45 billion package.

– It's a lot of money, but value creation is what you should focus on. He created an enormous amount of money. He then received a total of 5 percent of that increase in value. He says 5 percent is not abnormal in itself, but the numbers are very large.

Ekpo points out that when the agreement was concluded, the return requirement was almost impossible to achieve. If Musk had not agreed, the deal would have been worthless.

-No one thought he would succeed. He still takes the job and manages it in buckets and buckets. He stressed that one of the most important principles in running a company is to pay for what you put into it.

– I would say it was good for shareholders to repeat the vote they took in 2018, says Ekpo about the result.

– An unreasonably large salary package

In a report CBS The salary package could reportedly cause Tesla shares to become less valuable.

Harstveit believes there is still no clear answer as to what this will mean for shareholders.

-If Elon Musk does a good job as CEO, meaning he gets an increase in profits at Tesla so that the stock price goes up, that will be good for shareholders. At the same time, he says this does not mean that it is right to receive an unreasonably large salary package.

Musk had previously more or less confirmed that he would get support from the public meeting. Write it down CBS.

– It is expected that both resolutions will be passed by a good margin! He wrote on x/twitter Wednesday evening.