Tesla shareholders have voted to restore Elon Musk's $44.9 billion pay package.
The approval of moving Tesla's legal home to Texas was also approved at the annual meeting.
The vote may not be permanent as the legal battle is expected to continue in Delaware Chancery Court and Supreme Court.
In a major development, Tesla shareholders have voted to restore CEO Elon Musk's record-breaking $44.9 billion pay package, which was rejected by a Delaware judge earlier this year. The vote totals were not immediately announced at the annual stockholders’ meeting; however, the company stated that shareholders voted in favor of Musk's compensation plan that was initially approved by the board and stockholders six years ago. However, this victory may not be a permanent one for Musk as the package is likely to remain tied up in Delaware Chancery Court and Supreme Court for months due to the rejection. The legal battle will continue as Tesla tries to overturn the rejection, with some experts suggesting that it could take several more months before a resolution is reached. This development comes after a Delaware judge ruled in January that Musk essentially controlled the Tesla board when it ratified the package in 2018 and that it failed to fully inform shareholders who approved it at the same time. Tesla has said it would appeal but asked shareholders to reapprove the package at Thursday's annual meeting. A separate issue of moving the company's legal home to Texas to avoid Delaware courts was also approved, Musk said on Thursday at the meeting in Austin, Texas. Legal experts believe that this issue will still be decided in Delaware due to a technicality; as Musk's lawyers have assured the judge that they won’t try to move the case to Texas. While some believe that the new approval of the pay package may make it easier for Tesla to get it approved, others argue that this vote does not affect Judge McCormick's decision and is not legally binding. The legal dispute will continue as Tesla tries to overturn the rejection, with some experts suggesting that it could take several more months before a resolution is reached.
Tesla shareholders approved a $46 billion pay package for CEO Elon Musk.
Supporters of the pay package argue that it is necessary to tether Musk to Tesla and ensure he doesn’t start another business.
Critics call the pay package ‘excessive.’
The vote on Musk’s payout stems from a court ruling in January that struck down his previous pay deal, worth more almost $56 billion earlier this year.
Tesla said in April that it would once again take the issue to its shareholders, asking them to re-ratify the package.
Tesla Chairwoman Robyn Denholm wrote to shareholders that they should re-ratify the package because Musk has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value.
Denholm described the situation as ‘fundamentally unfair, and inconsistent with the will of the stockholders who voted for it.’
Tesla shareholders on Thursday also approved a proposal to move the company’s legal jurisdiction from Delaware to Texas, which could play a part in whether Musk’s payout materializes.
Some shareholders are concerned that Musk might decamp for another business or start a rival company if he isn’t richly rewarded for working at Tesla.
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The article contains editorializing and sensationalism. The author uses phrases like 'massive payouts worth almost $1 billion in today’s dollars', 'pop-the-champagne moment for Musk and Tesla shareholders', and 'large shareholders at the end of the day knew that voting no would risk Musk potentially eventually leaving as CEO.' These phrases are not factual statements but rather attempts to manipulate emotions. The author also selectively reports information, focusing only on the large payout package without mentioning any potential downsides or criticisms.
For instance, with Tesla shareholders approving the move to Texas, reapproval of the pay package could now be handled as a Texas corporation, which means the issue could fall under the purview of Texas courts.
The results of the shareholder vote, which concluded today, were announced during Tesla’s annual meeting, prompting a standing ovation from shareholders attending the Thursday event at Tesla’s headquarters in Austin, Texas.
It's incredible. I think we’re not just opening a new chapter for Tesla, we’re starting a new book.
Tesla shareholders have voted to restore Elon Musk’s $44.9 billion pay package
Chancellor Kathaleen St. Jude McCormick ruled in January that Musk essentially controlled the Tesla board when it ratified the package in 2018 and that it failed to fully inform shareholders who approved it the same year
Accuracy
No Contradictions at Time
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The article reports on Tesla shareholders voting to restore Elon Musk's $44.9 billion pay package, but it does not disclose that the vote is likely non-binding due to ongoing legal disputes. This selective reporting could mislead readers into believing that Musk will receive his compensation immediately.
But the favorable vote doesn’t necessarily mean that Musk will get the all-stock compensation anytime soon.
DETROIT -- Tesla shareholders have voted to restore CEO Elon Musk’s record $44.9 billion pay package
Fallacies
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The article contains an appeal to authority and inflammatory rhetoric. It also uses a dichotomous depiction of the situation.
A separate issue to move the company’s legal home to Texas to avoid the Delaware courts also was approved, Musk said Thursday at the meeting in Austin, Texas.
DETROIT -- Tesla shareholders have voted to restore CEO Elon Musk's record $44.9 billion pay package that was thrown out by a Delaware judge earlier this year.
