Tesla shareholders to vote whether Musk deserves pay package of billions that a judge struck down

Tesla shareholders will vote Thursday at the company’s annual meeting on whether a massive pay package for CEO Elon Musk that was already thrown out by a Delaware judge earlier this year should be restored.

Tesla shareholders will vote Thursday at the company’s annual meeting on whether a massive pay package for CEO Elon Musk that was already thrown out by a Delaware judge earlier this year should be restored. The compensation package, 303 million options to buy Tesla shares at a drastically reduced price, was worth $51 billion when it was voided by a Delaware judge nearly five months ago. The package was worth $46.8 billion as of Wednesday’s market close, due to a steady decline in Tesla share price (TSLA) this year. In a post on X on Wednesday, Musk said that shareholders were voting “by wide margins” in favor of reinstating his massive pay package. Tesla did not respond to a request for comment on his post. Tesla’s board says that if the shareholders don’t approve the pay package, the company won’t get the attention it needs from Musk as it faces several challenges: Tesla’s stock price has slid by more than half from its peak as a trillion-dollar company in late 2021, its sales have fallen short of forecasts and its profits are squeezed by a global price war for EVs that Musk started himself. The shareholders approved the original compensation package back in 2018, with 73% voting in favor. But Delaware Chancery Court Chancellor Kathaleen McCormick in January ruled in favor of shareholders who challenged the package. She wrote the process that Tesla board used to award the package was “deeply flawed” and that Musk and the board had failed to meet “the burden of proving that the compensation plan was fair.” She criticized the board for being too close to the controversial CEO to represent the interests of shareholders, writing that the board committee that came up with the package included Antonio Gracias, a personal friend of Musk’s who often took family vacations with the Tesla CEO, as well as Todd Maron, “Musk’s former divorce attorney and whose admiration for Musk moved him to tears during his deposition.”