Elon Musk can continue to hope for a billion-dollar Tesla share package that was promised to him in 2018. But he has not yet reached his goal
Tesla shareholders have once again approved a huge share package worth several dozen billion dollars for company boss Elon Musk. The compensation plan, originally approved in 2018, was overturned by a US court in January. The new vote does not mean that Musk will automatically receive the share package. But it does improve his chances of doing so.
The shareholders also voted to move Tesla’s registered office from the US state of Delaware to Texas, as the company announced at the annual general meeting. In the first vote in 2018, the share package received a majority of 73 percent. But then a shareholder sued against it – and in the end a judge in Delaware torpedoed the plan.
She concluded that Musk had too much influence behind the scenes in the negotiations over the generous compensation of the Tesla board of directors to be able to speak of a fair process. Since the shareholders were kept in the dark about the entanglements, they had no opportunity to make a well-considered decision, the judge argued.
Demand has cooled noticeably
At the time, Musk was granted the right to receive a good 300 million Tesla shares in small instalments at the 2018 price if the company met a number of ambitious goals over a period of up to ten years. Among other things, the market value was to rise from a good 50 billion dollars to 650 billion dollars. Based on this target, the value of the package was once estimated at around 56 billion dollars. But share prices fluctuate.
After rapid growth and thanks to the electric car euphoria at the time, Tesla quickly reached the mark and was even worth more than a trillion dollars at times – and Musk’s compensation package was around 100 billion dollars. Demand has since cooled noticeably and Tesla is now worth around 580 billion dollars on the stock market. In recent months, Musk had indicated that he could push forward the development of artificial intelligence applications elsewhere if he did not gain more control of Tesla. This has now triggered a new investor lawsuit in Delaware.
Source: Stern
