Elon Musk gets shareholder support for his €52 billion pay package

Tesla shareholders voted in favor of restore the salary package of 52 billion euros of CEO Elon Musk, which was annulled by a Delaware judge in January. Now, the value of the package plan has dropped to 45 billion euros due to the 26% drop in Tesla shares this year, despite the 2.9% rise recorded on Thursday.

Tesla investors have also voted in favor of moving company incorporation from Delaware to Texas. Both resolutions were “approved by side margins,” as published by Elon Musk on his private social media platform X, formerly known as Twitter.

The mammoth compensation plan, initiated in 2018, would raise Musk’s holdings to about 21% of the company if he exercised the options, underscoring confidence in Elon’s leadership at the helm of Tesla. The result of the vote, however, does not guarantee that Musk will receive compensationsince it only serves as public support to help you overturn the court’s ruling.

Elon Musk runs six companies, including Tesla, SpaceX, xAI, X Corp, Neuralink and OpenAI. Threatened to develop its AI products outside the company if it did not secure a 25% stake. Shareholders are also concerned that he will leave the company if the pay package is rejected.

Elon Musk’s 2018 Compensation Plan

Tesla’s board approved CEO Elon Musk’s pay plan in 2018, which was a performance-based compensation package. In summary, Musk would not receive any guaranteed salary or cash bonusesInstead, he was granted the option to buy 20.3 million Tesla sharesapproximately 12% of the company’s then outstanding shares over a 10-year period.

The options were divided into 12 tranches, each of which accrued based on Tesla’s capitalization milestones, starting at $100 billion and increasing in increments of $50 billion up to $650 billionas well as operational milestones, including increasing revenue to $175 billion and adjusted gross profits to $14 billion.

The plan grants Elon Musk stock options worth $56 billion if all performance targets are met.

In January, a Delaware court ruled against the package, stating that shareholders were not fully informed during the initial approval process. Although the shareholders have ratified the remuneration plan, this does not necessarily guarantee that the court will withdraw the sentence. However, if Tesla moved his registered office to Texas, he would allow the company to avoid the Delaware court’s jurisdiction over the compensation plan.

Elon Musk’s ambition for humanoid robots

At the 2024 annual shareholder meeting on Thursday, Elon Musk said the company’s Optimus humanoid robots could raise Tesla’s market capitalization to $25 trillion, although he did not specify a time frame.

Tesla’s market capitalization stood at $579 billion at the close of Thursday. It is worth noting that the market value of the electric vehicle (EV) manufacturer once exceeded $1 trillion in October 2021.

Tesla showed off Optimus Robots’ ability to perform household tasks, such as folding laundry. Elon Musk expressed his belief that humanoid robots could cook and even teach children. He said Tesla would begin limited production of Optimus and that he hopes to have more than 1,000, possibly a few thousand robots at Tesla in 2025.

Meanwhile, Cybertruck, the Supercharge network and self-driving cars are the biggest news for the electric vehicle maker this year. Elon Musk stated that weekly Cybertruck production reached a record 1,300 units.

Tesla performs worse than the market

The actions of Tesla have fallen 26% so far this year, well behind the so-called Magnificent Seven and the benchmark S&P500 index, which has risen 14% so far in 2024.

In the first quarter, Tesla reported a disappointing delivery figure of 368,810, 8.5% less than last year. Tesla posted revenue of $21.3 billion, down 9% from the same quarter a year earlier. Elon Musk declared that the company intends to accelerate mass production of affordable electric vehicle modelsleading Tesla shares to rise 12% that day.