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Musk says Tesla resolutions for pay plan, Texas move passing by "wide margin"

Published 13/06/2024, 04:44
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Investing.com-- Tesla Inc (NASDAQ:TSLA) shareholder resolutions for CEO Elon Musk’s $56 billion pay package and for the company to reincorporate in Texas from Delaware were seen passing by a wide margin, Musk said in a social media post on Wednesday.

Shareholders had begun voting on Musk’s controversial pay package and the move to Texas this week, with Musk stating that both resolutions were seeing strong shareholder support so far.

"Both Tesla shareholder resolutions are currently passing by wide margins! Thanks for your support!!," Musk said in a post on the social media platform X.

Reuters also reported a similar trend in early voting, citing a source familiar with the tally. 

Musk’s pay package- the highest seen for a corporate executive so far- was struck down by a Delaware judge earlier this year after a slew of lawsuits and complaints from shareholders. 

This week’s vote will decide its reinstatement, and Tesla's reincorporation in Texas after Musk criticized unfavorable conditions in Delaware. 

Several major Tesla shareholders have already made their positions clear. Norges Bank, Nordea Asset and two California pension holders have signaled they intend to reject the package, while Tesla bull Baron Capital, Cathie Wood’s Ark Invest and the Florida State Board of Administration said they will vote in favor of the resolution.

Barclays analysts said in a recent note than failure to approve Musk’s pay package was a major downside risk for Tesla, given that Musk had led the company to a $1 trillion valuation in recent years. Wedbush analysts had also cited a similar trend, and that sparring over the pay package was detrimental to Tesla.

Approval of the pay package opens the door for Musk to receive up to nearly $56 billion in stock options, although a recent decline in Tesla’s shares put the value closer to $45 billion.

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