Tesla|The compensation package of more than 45 billion dollars promised to Tesla’s CEO is still not certain, even though the general meeting confirmed it for the second time.
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Tesla reaffirmed Elon Musk’s more than $45 billion compensation package, but its realization is uncertain.
The package has previously been invalidated in court, and some shareholders oppose it.
Musk’s threat to move development away from Tesla has drawn criticism.
Musk’s compensation package is significantly larger than the packages of other US CEOs.
Electric car manufacturer To the CEO of Tesla For Elon Musk the planned remuneration package of more than 45 billion dollars is still at stake.
On Thursday, Tesla’s general meeting confirmed for the second time a package that some shareholders oppose. The first decision on the remuneration package was annulled in court. However, the general meeting is still pushing the package forward.
British newspaper of The Guardian in the article, several legal experts justify the problems of the extraordinary remuneration package from a legal point of view.
“I expect there will be a big controversy if Tesla plans to use this [torstaisen yhtiökokouksen] vote as a basis to overturn the court’s position,” a professor at the Columbia University School of Law Eric Talley commented to The Guardian.
Musk has even been seen to have pressured shareholders to confirm the remuneration package.
Tesla’s shareholders initially decided on a generous stock option arrangement in 2018. It is the largest CEO compensation program in US history.
One of the company’s shareholders challenged the arrangement, which he considered unfair to the other owners. A judge in Delaware, the company’s home state at the time, invalidated the contract in January.
At the general meeting held on Thursday, it was decided to confirm the remuneration package again. According to shareholders, Musk earned his additional compensation because of his “unique contribution” to the company.
At the same time, Tesla’s headquarters were moved from Delaware to the state of Texas.
The beginning the lawyer of the shareholder who originally challenged the remuneration package announced that he considers Thursday’s vote “deeply flawed in the eyes of the law”.
According to The Guardian, the lawyer says that he considers the confirmation decision to be invalid within the framework of the law and does not believe that it will affect the case he is pursuing, which will probably still be processed at various court levels in Delaware.
Professor of Law at Tulane University by Ann Lipton according to Tesla’s point of view is that the recent vote corrected the shortcomings of the original compensation package.
“Legally, it is not entirely clear what effect the vote will have,” Lipton estimates.
Criticism has also been aroused by the fact that in January Musk threatened to move the development of artificial intelligence and robotics concepts away from Tesla, if the reward package is not implemented. According to Professor Eric Talley, Thursday’s voting result can be considered the result of coercion due to Musk’s previous comments.
Musk the compensation package dwarfs that of other US CEOs.
On average, the extra compensation of US bosses has been about 200 times the median annual salary of the company’s employees. The median salary for Tesla employees was news agency AP according to 2023, a good 45,000 dollars, so a bonus of 45 billion dollars would be almost a million times compared to that.
The Delaware state judge who evaluated Tesla’s remuneration package found Musk’s remuneration “incomprehensible”.
Last year, according to the company, Musk did not even receive an annual salary, let alone additional bonuses.
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