Tesla Seeks Shareholder Vote on $56B Elon Musk Compensation Amid Market Value Growth and Challenges

Austin, Texas, Texas United States of America
Annual meeting scheduled for June 13, 2024
CEO Elon Musk suggested moving incorporation from Delaware to Texas for vote
Compensation package voided by Delaware court in January 2024
Shareholders originally approved package in February 2018 with Tesla market value around $53B
Tesla's current market value over $500B according to LSEG data
Tesla seeking shareholder vote on $56B Elon Musk compensation package
Tesla Seeks Shareholder Vote on $56B Elon Musk Compensation Amid Market Value Growth and Challenges

Tesla, the electric vehicle and clean energy company led by Elon Musk, is asking its shareholders to vote again on Musk's $56 billion compensation package that was voided by a Delaware court earlier this year. The company also plans to ask for approval to move Tesla's state of incorporation from Delaware to Texas.

The controversial pay package, which includes no salary or cash bonus but rewards based on Tesla's market value reaching up to $650 billion over 10 years, was rejected by Judge Kathaleen McCormick of Delaware's Court of Chancery in January. The judge deemed it an 'unfathomable sum' that was unfair to shareholders.

Tesla CEO Elon Musk has been a vocal critic of the ruling and suggested that the company could move its incorporation from Delaware to Texas and have shareholders vote on the package again. The electric automaker announced this plan in a regulatory filing on April 17, 2024.

The proposed compensation package was first approved by Tesla shareholders in February 2018. At that time, Tesla's market value was around $53 billion. However, the company's stock has since experienced significant growth and is currently valued at over $500 billion according to LSEG data.

Tesla also faces other challenges, including a recent round of layoffs affecting about 14,000 employees and price cuts on some models. The company delivered nearly 9% fewer vehicles from January through March compared to the same period last year.

The annual meeting is scheduled for June 13, 2024.


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Confidence

91%

Doubts
  • Could moving Tesla's incorporation from Delaware to Texas impact shareholder voting in any significant way?
  • Is the market value growth a reliable indicator of the company's success?

Sources

81%

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 wants shareholders to reinstate $56 billion pay package for Musk rejected by Delaware judge

ABC NEWS SITE NAMES Name: ABC News Site Names URL: https://abcnews.go.com/Politics/us-officially-blames-iran_106834435 ABC News Wednesday, 17 April 2024 14:46
  • Unique Points
    • Tesla will ask shareholders to reinstate a $56 billion compensation package for CEO Elon Musk during its annual meeting on June 13, 2023.
    • Tesla posted record deliveries of over 1.8 million electric vehicles worldwide in 2023.
    • Tesla delivered nearly 9% fewer vehicles from January through March, compared to the same period last year.
    • Musk’s compensation package was worth more than $55.8 billion at the time of the Delaware court ruling, but its value has eroded due to Tesla’s stock slide this year.
    • Tesla has cut prices on some models by up to $20,000 and let about 14,000 employees go in a recent round of layoffs.
  • Accuracy
    • A Delaware judge voided the record-setting compensation deal, ruling it was ‘deeply flawed.’
    • Tesla also plans to ask shareholders to approve moving the company’s incorporation from Delaware to Texas.
  • Deception (30%)
    The article contains selective reporting as it only mentions the potential $56 billion pay package for Elon Musk and Tesla's request to reinstate it, without providing context about the reasons why the judge rejected it. The article also implies that Musk has not been paid for his work since the ruling, but fails to mention that he was still being compensated under a different CEO pay package approved by shareholders in 2018. Additionally, there is an instance of emotional manipulation as the article attempts to elicit sympathy for Musk and Tesla shareholders by portraying the judge's decision as 'fundamentally unfair'.
    • Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years...
    • The company said it would ask shareholders to reinstate a $56 billion compensation package for CEO Elon Musk that was rejected by a judge in Delaware this year.
    • This week, Tesla said it was letting about 10% of its workers go, about 14,000 people.
  • Fallacies (85%)
    The author makes an appeal to authority by stating that the Delaware Court's decision is 'fundamentally unfair' and 'inconsistent with the will of the stockholders'. This is an appeal to emotion and a misrepresentation of the court's ruling.
    • ]The many stockholders from whom we already have heard strikes us – and the many stockholders from whom we already have heard[...]as fundamentally unfair, and inconsistent with the will of the stockholders who voted for it.[/
  • 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

82%

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 asks shareholders to vote again on Musk's $56 billion payout

CNBC News Rohan Goswami Wednesday, 17 April 2024 11:48
  • Unique Points
    • Tesla will ask shareholders to reinstate Elon Musk’s $56 billion compensation package.
    • Tesla plans to ask shareholders to approve moving the company’s incorporation from Delaware to Texas.
  • Accuracy
    • The Delaware court voided the compensation package earlier this year.
    • Tesla believes the Delaware court made errors of fact and incorrect conclusions of law in its decision.
  • Deception (30%)
    The article contains selective reporting as Tesla only disclosed information about the court's ruling on Musk's pay package and the company's decision to ask shareholders to reinstate it, without mentioning that the same judge also ruled against Tesla moving its incorporation from Delaware to Texas. The article also includes emotional manipulation through phrases like 'fundamental problem for the company', 'fiercely controversial', and 'dozens of institutional stockholders disagree with the Tornetta decision'.
    • Delaware has long been a preferred home for corporations – more than 60% of the Fortune 500 companies are incorporated there – because the state has a robust legal framework and court system dedicated to resolving corporate issues, like executive pay, but also broader contract negotiations. Moving from Delaware to Texas Tesla’s new proposal cautions shareholders that the Delaware court found the company’s initial 2018 disclosures to be deficient,
    • The two proposals are likely to be fiercely controversial.
    • Tesla has hired a proxy solicitor, Innisfree M&A, and plans to spend an undetermined amount, in the millions, to help secure the votes for the two proposals.
  • 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

99%

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 (TSLA) Asks Shareholders to Re-Ratify Elon Musk’s $56 Billion Payout

Bloomberg News Now Dana Hull, Wednesday, 17 April 2024 14:48
  • Unique Points
    • Tesla will ask shareholders to vote again on Elon Musk’s $56 billion compensation package.
    • The Delaware court voided the compensation package earlier this year.
    • Tesla also plans to ask shareholders to approve moving the company’s incorporation from Delaware to Texas.
  • Accuracy
    • Tesla will ask shareholders to reinstate a $56 billion compensation package for CEO Elon Musk during its annual meeting on June 13, 2023.
    • Tesla will also ask shareholders to move Tesla’s corporate home from Delaware to Texas.
  • 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 again seeks shareholder nod for Musk's 2018 pay voided by judge

Yahoo Finance Unknown Reuters Wednesday, 17 April 2024 14:48
  • Unique Points
    • Tesla requested shareholder approval for Elon Musk’s $56 billion pay package that was rejected by a Delaware judge in January.
    • CEO Elon Musk’s compensation includes no salary or cash bonus, but rewards based on Tesla’s market value reaching up to $650 billion over 10 years.
    • Judge Kathaleen McCormick of Delaware’s Court of Chancery rejected the compensation, deeming it an ‘unfathomable sum’ that was unfair to shareholders.
  • Accuracy
    • Tesla will ask shareholders to reinstate Elon Musk’s $56 billion pay package.
    • Judge Kathaleen St. Jude McCormick ruled that Musk is not entitled to the compensation package in January, 2023.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (95%)
    The author does not commit any formal or informal fallacies in the article. However, there are some instances of inflammatory rhetoric used by the judge and Tesla's board chairperson that could be considered questionable. The author accurately reports these statements without endorsing them. Therefore, I cannot give a perfect score due to these instances.
    • ][Robyn Denholm, Tesla board chairperson] We do not agree with what the Delaware Court decided, and we do not think that what the Delaware Court said is how corporate law should or does work.[/
    • ][Kathaleen McCormick of Delaware’s Court of Chancery] termed the compensation granted by the board as ‘an unfathomable sum’ that was unfair to shareholders.[/
  • 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

81%

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 asks shareholders to move to Texas and re-pass Elon Musk’s massive compensation plan

Electrek Fred Lambert Wednesday, 17 April 2024 12:38
  • Unique Points
    • Tesla has filed a proxy with shareholders to ask them to vote for the company to move its state of incorporation to Texas and re-pass Elon Musk’s 2018 CEO massive compensation plan that was rescinded by a Delaware judge earlier this year.
    • Elon Musk blamed the ruling on a ‘politically motivated judge’ in Delaware and suggested that Tesla could move its state of incorporation to Texas and have shareholders vote on the package again.
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (30%)
    The article contains selective reporting as the author only mentions the parts of the case that support Elon Musk's position and ignores the governance issues that led to the judgment. The author also uses emotional manipulation by implying that it is 'fundamentally unfair' for Musk not to be paid for his work since 2018, despite acknowledging the serious governance issues at Tesla.
    • As a shareholder, I’d be tempted to vote for the compensation again, but not if Tesla didn’t get the message about governance, which it clearly didn’t based on Denholm’s presentation of the issue.
    • The judge found that Tesla had governance issues when coming up with compensation plan and those issues were not communicated to shareholders before voting on the plan.
  • Fallacies (80%)
    The author, Fred Lambert, makes an appeal to authority when stating that the Delaware court found that Tesla's board and Musk didn't play by the rules of a public company without providing any evidence or citation to support this claim. Additionally, there is inflammatory rhetoric used when describing the judge as 'politically motivated'.
    • The Delaware court found that Tesla had governance issues when coming up with compensation plan and those issues were not communicated to shareholders before voting on the plan.
    • The CEO blamed the ruling on a ‘politically motivated judge’ in Delaware and suggested that Tesla could move its state of incorporation to Texas and have shareholders vote on the package again.
    • As a shareholder, I’d be tempted to vote for the compensation again, but not if Tesla didn’t get the message about governance, which it clearly didn’t based on Denholm’s presentation of the issue.
  • 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