Elon Musk has claimed that Tesla shareholders are voting by a wide margin to approve a compensation package for him worth around $45bn (£35bn) in the run-up to the manufacturer’s crucial annual general meeting. of electric cars to be held later on Thursday.
The pay package, which is the highest ever awarded to a CEO of a US company, is subject to an investor vote after a US judge threw it out earlier this year. Shareholders will also vote on Musk’s proposal to move the electric car maker’s legal base to Texas.
Several investors, including Norway’s sovereign wealth fund and the California State Teachers’ Retirement System, have already indicated they will reject the pay package. Proxy advisory firms Glass Lewis and Institutional Shareholder Services have also urged shareholders to oppose the award.
However, on Wednesday night Musk suggested that investors were voting in overwhelming numbers to approve the pay package, along with the move to Texas. He wrote on social media platform X that: “Both Tesla shareholder resolutions are currently passing by wide margins! Thanks for your support!!”
The result of the vote will be announced at Tesla’s headquarters in Texas at 4:30 p.m. ET (9:30 p.m. UK time).
Under the pay plan, Musk had been eligible to receive up to $55.8 billion in stock options if Tesla reached certain milestones, which the company did. However, after a drop in the stock price, the current value of those options is approaching $45 billion.
Even if the pay package is approved, Musk is likely to face more obstacles, including the possibility of new litigation. Legal experts said there were questions about whether the Delaware court that blocked the pay deal would accept the new vote, which is not legally binding, and allow the pay package to be reinstated.
Tesla’s board of directors agreed to the salary compensation in 2018, but a Tesla shareholder sued over the compensation. In January, Delaware Judge Kathaleen McCormick ruled that Tesla’s board of directors had improperly established the “historically unprecedented compensation plan” and questioned whether the size of the award was even necessary to retain Musk at Tesla.
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“Carried away by the ‘everything good’ rhetoric, or perhaps excited by Musk’s superstar appeal, the board never asked the $55.8 billion question: Was the plan even necessary for Tesla to retain Musk and achieve its goals?” McCormick wrote in his decision.