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Tesla shareholders have approved a $45 billion (roughly Rs. 3.7 lakh crore) package from CEO Elon Musk. The results of the polls were announced on Thursday. Recently, Musk’s package was challenged by some shareholders in a Delaware court. Elon Musk appeared overjoyed after the package was approved by shareholders. Taking to the stage during the annual meeting at Tesla’s headquarters, Musk said – ‘I just want to start by saying, hey, I love you’.
Musk expresses his happiness on stage during the annual meeting at Tesla’s headquarters.
Relief for Musk supporters
The result is a relief for Musk’s supporters. This is because they feared that if the package was rejected, Musk would spend less time in Tesla’s management or even decide to leave the company. “I think it’s important for Musk to stay on top,” said Tasha Keeney, director of investment analysis at ARK Invest.
The decision is a blow to investors who had hoped that rejecting Musk’s package would send a message about capping CEO pay. “This is more of a package than we’ve seen in the United States and I don’t think it sets a good precedent,” said Christine Hull, founder and chief investment officer of Nia Impact Capital.
Elon Musk’s package was prepared in 2017
- Tesla worked out Musk’s pay package in 2017, which saw the CEO award stock options in 12 separate installments. There was a condition in this package that this package will be available only when the revenue and market targets set by the company are achieved.
- 73% of shareholders approved Musk’s package. According to Tesla’s stock price, the package was earlier valued at $56 billion (roughly Rs. 4.67 lakh crore), which has increased to $45 billion (roughly Rs. 3.7 lakh crore) due to the fall in the share price.
- Some shareholders recently filed suit saying the package was unfair. After this, Kathleen St. J., Chancellor of the Court of Chancery in Delaware. McCormick overruled him. The judge said that the process of determining the package was not proper.
90% of retail investors voted in favor of the package
Tesla’s board appointed Kathleen St. This poll was conducted in response to McCormick’s decision. 90% of retail investors voted in favor of this package.
What is a stock option?
Stock option means giving shares to employees of the company. After receiving the shares, the employee can earn profit by selling these shares as per the terms.
