Tesla shareholders have approved CEO Elon Musk’s nearly $1 trillion pay plan. The proposal gained 75% support among voting shares at the company’s annual meeting in Austin, Texas. The board recommended approval even though there were dissenting voices including top proxy advisors Glass Lewis and ISS recommending a vote against it.
Under the plan, 12 tranches of shares will be granted over the next decade. This increases Elon Musk’s voting power and ownership from about 13% to 25%, adding over 423 million shares. This is not a free giveaway for Musk, however, as the full package is contingent on Tesla hitting several aggressive milestones.
Tesla must reach an $8.5 trillion market capitalization, with the first tranche being issued at the $2 trillion market cap, earnings must also reach $400 billion in annual adjusted profit. Operationally, there must be 20 million vehicle deliveries, 10 million active Full Self-Driving subscriptions, one million Optimus humanoid robots delivered, and one million robotaxis in commercial operation.
While the goals are very ambitious and may not be reached, Musk still stands to gain tens of billions of dollars by only meeting a handful of the more attainable goals. The plan also mentions “covered events” that would allow Musk to earn shares without meeting the required operation milestones, these include natural disasters, wars, pandemics, or changes to law/regulation.
The vote on this new pay plan follows a Delaware Court of Chancery ruling last year that said an earlier 2018 pay plan was granted improperly by the Tesla board. Musk appealed that matter and it is yet to be decided.
Elon Musk has been using his X (formerly Twitter) megaphone to stir political discord at home and abroad, notably supporting convicted criminal Stephen Yaxley-Lennon in the UK who has a long history in the far-right street politics scene, as well as Alice Weidel, leader of the Alternative for Germany (AfD), whose grandfather, Hans Weidel, was a Nazi judge appointed directly by Adolf Hitler, leader of Nazi Germany.
Under the new pay plan there are no new limits on Musk’s political activities or interference, nor does it establish a minimum amount of time he must spend working at Tesla.
Source: CNBC