Tesla shareholders on Thursday cast their votes to officially ratify CEO Elon Musk's substantial 2018 pay plan, five months after a Delaware judge mandated the company to retract the package, citing improper grant procedures by the board.
Musk Winning Over Unfathomable Pay Package
After the votes were tallied at the company's annual shareholder meeting in Austin, Texas, Musk exclaimed, "Hot damn, I love you guys." The vote supporting the compensation plan does not override the court's ruling. Still, it provides a public relations victory for Musk, which could aid his effort to persuade a court to grant him his performance options in the future.
The company did not immediately disclose the percentage of shareholders who voted in favor or against the $56 billion compensation package awarded in 2018, which a Delaware judge subsequently invalidated this year. Presently, the value of the pay plan stands at approximately $48 billion, which initially garnered 73% support six years ago.
Musk's Pay Package Scrutiny
The compensation package faced scrutiny in January when a Delaware court deemed it unfathomable. Judge Kathaleen McCormick claimed that Tesla's board members lacked independence from Musk, failed to negotiate properly with the CEO at arm's length, and neglected to provide shareholders with a comprehensive understanding before seeking their vote on his pay plan.
Tesla shares surged 2.9% in Thursday's regular trading to close at $182.47 after Musk's announcement on X regarding the proposal's impending approval. However, despite this uptick, the stock remains down 27% for the year, reflecting Tesla's challenges with dwindling sales attributed to an aging electric vehicle lineup and heightened competition in China.
At the annual meeting, final votes were cast on a dozen proxy proposals, among them an initiative spearheaded by Musk to relocate Tesla's incorporation site from Delaware to Texas, the location of the automaker's most prominent U.S. factory.
Elon Musk's Optimism Gaining Investors' Trust
At the previous shareholder meeting in May 2023, Musk forecasted Tesla's economic uptick within 12 months, announcing the plans to commence deliveries of production Cybertrucks by late 2023, and disclosed intentions to experiment with advertising to gauge its effectiveness.
Recent inflation and job figures suggest some signs of improvement. Tesla hosted a Cybertruck delivery event in late 2023 and has engaged in advertising over the past year, including on X, the social media platform formerly known as Twitter, which Musk acquired for $44 billion in late 2022.
Musk, characterizing himself as pathologically optimistic, conveyed to Tesla shareholders during the meeting that the company's progress in vehicle autonomy is substantial enough to increase the company's value tenfold potentially. Despite Musk's ongoing promises of achieving such levels of autonomous technology since 2016, Tesla has yet to deliver on this front. In contrast, competitors such as Pony.ai, Didi, and Waymo have significantly progressed in developing robotaxis and launching commercial services.
Musk also discussed the ambition of a ride-hailing network with Tesla vehicles equipped with self-driving systems, although he did not offer a timeline for development and rollout. He mentioned that some cars would be owned by Tesla, while customers could participate by adding or removing their vehicles from the fleet, similar to an Airbnb model.
Musk noted a weekly record of 1,300 shipments as deliveries ramped up, pledged the commencement of the limited production of Optimus in 2025, and predicted the humanoid robots trial in its factories the following year. Musk also predicted a few thousand Optimus robots operating at Tesla by next year.
