Tesla Shareholders Vote on Elon Musk's Record-Breaking $56 Billion Pay Package Amid Concerns Over Profitability and Growth

California, USA, California, USA United States of America
Early voting suggests that the pay package could still be approved at Tesla's annual meeting on June 13th.
Robyn Denholm, Tesla's board chair, is urging shareholders to approve the pay package to keep Musk motivated and focused on creating value for the company.
Some investors are concerned about Tesla's profitability and growth, as well as its ability to deliver a lower-cost Tesla vehicle and full self-driving capability.
Tesla's CEO Elon Musk is seeking approval for his $56 billion pay package from shareholders for the second time.
The pay package was originally approved in 2018 but was voided by a Delaware judge due to procedural errors in the approval process.
Tesla Shareholders Vote on Elon Musk's Record-Breaking $56 Billion Pay Package Amid Concerns Over Profitability and Growth

Tesla's CEO Elon Musk is seeking the approval of his $56 billion pay package from shareholders for the second time, after a Delaware judge voided the first vote earlier this year. The package, which would make Musk the most highly compensated CEO in history, has been met with skepticism from some investors and proxy firms. However, early voting suggests that it could still be approved at Tesla's annual meeting on June 13th.

Robyn Denholm, Tesla's board chair, is urging shareholders to approve the pay package in order to keep Musk motivated and focused on creating value for the company. She argues that Musk's many projects outside of Tesla have taken his attention away from the electric vehicle maker, which is his primary source of wealth and popularity.

Musk has threatened to spin out Tesla's AI work into a separate company if his demands are not met. He currently holds about 13% of the company after selling billions of dollars worth of shares to acquire Twitter.

The pay package, which includes stock options and other incentives, was originally approved in 2018 but was voided by the Delaware judge due to procedural errors in the approval process. Tesla is now seeking reapproval with full disclosure of all the court-identified flaws.

The vote on Musk's pay package is not just about the money, according to Denholm. She insists that it demonstrates shareholders' support for Musk's vision for Tesla and recognition of his extraordinary accomplishments.

However, some investors are concerned about Tesla's profitability and growth, as well as its ability to deliver a lower-cost Tesla vehicle and full self-driving capability. Institutional Shareholder Services has recommended that shareholders vote against the pay package.

Approval of the pay package would be an important step to move this distraction in the rearview mirror, according to Wedbush. It could help lift one of the overhangs on Tesla's stock and carry momentum into the expected Aug. 8 Tesla event, where the long-promised robotaxi is expected to be unveiled.

Despite some concerns, it is likely that Musk's pay package will be overwhelmingly approved by shareholders at the upcoming annual meeting.


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Confidence

90%

Doubts
  • Are there any potential conflicts of interest in the board chair's push for shareholders to approve Musk's pay package?
  • How will Tesla's profitability and growth concerns affect the outcome of the vote?
  • Is there a possibility that Musk may follow through with his threat to spin out Tesla's AI work into a separate company?

Sources

96%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Former Tesla board member says he wouldn’t vote for Musk’s $56 billion pay package

Fortune Media Inc. Amanda Gerut Thursday, 06 June 2024 00:00
  • Unique Points
    • Tesla's former audit committee chair and clean technology venture investor, Steve Westly, believes that Tesla’s profitability and growth have slowed down and shareholders are concerned about the company’s ability to deliver a lower-cost Tesla vehicle and full self-driving capability.
  • Accuracy
    • Tesla's former audit committee chair and clean technology venture investor, Steve Westly, stated that he wouldn’t back Elon Musk’s $56 billion pay package.
    • Former Tesla board member Robyn Denholm is calling on shareholders to approve Elon Musk’s $56 billion pay package.
    • Tesla shareholders are set to vote on Musk’s pay package in the upcoming annual shareholder meeting.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

97%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Tesla CEO Elon Musk could leave if $56 billion pay package not approved, shareholders warned

The Verge Andrew J. Thursday, 06 June 2024 18:41
  • Unique Points
    • Tesla board chair Robyn Denholm is calling on shareholders to approve Elon Musk’s $56 billion pay package.
    • Denholm implies that if the pay package is not approved, Musk could leave Tesla for ‘other places’.
  • Accuracy
    • Elon Musk could leave Tesla if the pay package is not approved.
    • About 25% of Tesla’s shares have already voted with over 80% in favor of Musk’s package.
    • Musk faces many different projects, including SpaceX, The Boring Company, Neuralink, X and xAI which have taken his attention away from Tesla.
    • If Musk’s pay proposal fails to win majority support, it remains unclear whether Musk will remain at Tesla.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (95%)
    The author makes an appeal to emotion by implying that Musk's departure would be detrimental to the company and its shareholders. This is a form of emotional appeal fallacy. The author also uses a dichotomous depiction by presenting only two options: either approve the pay package or risk losing Musk. This is a false dilemma fallacy.
    • ][The author] implies that Musk could decamp to 'other places' without proper motivation.[/
    • ][The author] We all made a commitment to Elon, Elon honored his commitment and produced tremendous value for our stockholders. Honoring our commitment to Elon demonstrates that we support his vision for Tesla and recognize his extraordinary accomplishments – this is what will motivate him to continue to create value for stockholders.[/
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

95%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Musk’s $56bn is not the problem

Financial Times Friday, 07 June 2024 08:25
  • Unique Points
    • Tesla board chair Robyn Denholm is calling on shareholders to approve Elon Musk’s $56 billion pay package.
    • Elon Musk had to increase Tesla’s market value from $59 billion to $650 billion within 10 years for his compensation.
    • The Delaware lawsuit alleged Tesla’s board breached its fiduciary duty by awarding Musk this incentive-based compensation plan.
    • Tesla formed a new special committee and is now asking its shareholders to ratify Musk’s original compensation package with full disclosure of all the court-identified flaws.
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication

83%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Tesla’s Shareholders Should Get to Decide Musk’s Compensation

Bloomberg Law Zohar Goshen Friday, 07 June 2024 08:27
  • Unique Points
    • The Delaware Chancery Court's decision in January nullified Elon Musk’s $55 billion compensation package.
    • ,
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (30%)
    The author makes several statements that could be considered editorializing and pontification. For example, the author states 'Seeking such ratification isn’t just permitted under established Delaware law—it’s a sensible path forward.' This statement is an opinion of the author and not a fact. Additionally, the author implies that shareholders should have say in executive compensation decisions by stating 'Shareholders should have say in decisions affecting their investment, including executive compensation.' This statement could be considered emotional manipulation as it appeals to the emotions of shareholders and suggests that they are being wronged if they do not have a say in Musk's compensation. The author also engages in selective reporting by only discussing the negative aspects of Tesla's financial performance during the time period when Musk received no guaranteed compensation, while ignoring any positive developments. Lastly, the author references a Delaware court case and interprets its implications for this specific situation without providing any peer-reviewed studies or scientific evidence to support their interpretation.
    • Shareholders should have say in decisions affecting their investment, including executive compensation.
    • Seeking such ratification isn’t just permitted under established Delaware law—it’s a sensible path forward.
  • Fallacies (90%)
    The author makes an appeal to authority by citing Delaware law and court cases to support his argument. He also uses inflammatory rhetoric when describing the compensation package as 'outrageous' and a 'publicity stunt'. However, he does not commit any formal fallacies or dichotomous depictions.
    • ]Delaware law is designed to protect minority shareholders during negotiations with a controller.[
    • In 2018, a Delaware court concluded that CBS’s decision to pay its controlling shareholder Sumner Redstone $13 million after he was deemed incapacitated likely constituted waste[.
    • The only question is what [Musk] deserved to be paid.
  • Bias (95%)
    The author expresses a clear bias towards allowing Tesla's shareholders to decide Musk's compensation, arguing that they should have the right to make decisions affecting their investment. The author also argues against the idea that Musk's compensation could be considered waste or a gift under Delaware law, implying that those who argue otherwise lack 'ordinary, sound business judgment'.
    • It would be strange to conclude that a majority of Tesla’s stockholders, including some very large and sophisticated institutions, lack ‘ordinary, sound business judgment’ on the question of how much Musk should be paid as their CEO.
      • Seeking such ratification isn’t just permitted under established Delaware law—it’s a sensible path forward. Shareholders should have say in decisions affecting their investment, including executive compensation.
        • The only question is what he deserved to be paid. Once we ask this question, the package is no longer a gift or waste.
        • Site Conflicts Of Interest (100%)
          None Found At Time Of Publication
        • Author Conflicts Of Interest (100%)
          None Found At Time Of Publication

        97%

        The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
        (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

        A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

        Musk's $56B pay package likely to win 'overwhelming' support, Wedbush says

        Yahoo Finance Unknown Investing.com Friday, 07 June 2024 08:28
        • Unique Points
          • Elon Musk’s $56 billion pay package is likely to be ‘overwhelmingly’ approved by Tesla shareholders at the upcoming annual meeting.
          • Approval of the pay package would be an important step to move this ‘distraction in the rearview mirror’
          • Autonomous and full self-driving is key to Tesla’s future, Musk needs to make this clear at the shareholder meeting.
          • Execution of a lower cost vehicle and driving incremental demand in the key China market must be flawless or it could derail the bull thesis in the next 6 to 12 months.
          • The long-promised robotaxi is expected to be unveiled at an expected Aug. 8 Tesla event.
        • Accuracy
          • Tesla shareholders are set to vote on Musk’s pay package in the upcoming annual shareholder meeting.
          • Musk currently holds about 13% of Tesla after selling billions of dollars worth of shares to acquire Twitter.
          • Musk had to increase Tesla’s market value from $59 billion to $650 billion within 10 years for his compensation.
        • Deception (100%)
          None Found At Time Of Publication
        • Fallacies (95%)
          The author makes an assertion about the expected outcome of a shareholder vote, but does not provide any evidence or reasoning to support this claim. This is an example of an appeal to authority fallacy. The author also uses the term 'overwhelming' to describe the expected approval, which is a form of exaggeration and emotional language that can influence readers without providing any factual basis.
          • ]The big vote on whether to reapprove Tesla Inc (NASDAQ:TSLA) CEO Elon Musk’s $56 billion pay package is likely to win ‘overwhelming’ approval from shareholders at next week’s annual meeting[
          • We believe autonomous and FSD is key to Tesla’s future and Musk needs to making this crystal clear at the shareholder meeting next week
        • Bias (100%)
          None Found At Time Of Publication
        • Site Conflicts Of Interest (100%)
          None Found At Time Of Publication
        • Author Conflicts Of Interest (100%)
          None Found At Time Of Publication