The vote marks a significant win for Musk, who had been actively campaigning for the pay package’s reinstatement.
In a resounding show of support, Tesla’s legion of small-investor allies rallied behind CEO Elon Musk, securing a decisive victory for his controversial $56 billion pay package on Thursday. This outcome, announced at the company’s shareholder meeting in Austin, Texas, came despite opposition from several major institutional investors.
“We have the most awesome shareholder base,” a triumphant Musk declared to a cheering crowd at the Tesla factory. “Hot damn, I love you guys.”
The vote marks a significant win for Musk, who had been actively campaigning for the pay package’s reinstatement after a Delaware judge voided it in January. The judge had ruled that the original approval process, which lacked sufficient independent oversight, was flawed.
While institutional investors remained divided on the issue, with some echoing concerns over excessive compensation, retail investors emerged as a united front. Many had taken to social media platforms like X (formerly Twitter) in the weeks leading up to the vote, advocating for Musk and his contributions to Tesla’s success.
This unusual display of activism from typically apathetic small investors highlights Musk’s unique ability to cultivate a loyal following. The CEO himself had been actively courting their support through regular social media posts, a dedicated website explaining the proposals, and even factory tours for some voting shareholders.
“About 90% of the retail investors who voted were in favour,” Musk proudly revealed in a post on X over the weekend.
Both Tesla shareholder resolutions are currently passing by wide margins!
♥️♥️ Thanks for your support!! ♥️♥️ pic.twitter.com/udf56VGQdo
— Elon Musk (@elonmusk) June 13, 2024
This overwhelming support, coupled with backing from some large institutional investors, proved crucial in swaying the vote. However, the battle might not be over. Musk still faces legal challenges in Delaware, where the judge previously characterised the Tesla board as “beholden” to the CEO.
HOT DAMN I LOVE YOU GUYS! ♥️
一 Elon Musk pic.twitter.com/mIt1fZ9Qi3
— DogeDesigner (@cb_doge) June 13, 2024
Deconstructing Elon Musk’s $56 Billion Tesla Payday
But how did this eye-popping figure come about? The answer lies in an audacious ten-year performance-based plan. Musk was granted stock options that would vest in 12 tranches upon achieving a series of ambitious milestones. These milestones encompassed market capitalisation, earnings, and revenue targets.
The sheer scale of the potential reward was staggering: 303 million stock options, representing approximately 12% of Tesla’s outstanding stock in 2018. Each tranche unlocked 1% of those options, requiring Musk to hit a combination of 28 challenging targets.
Fast forward to 2023, and Musk’s gamble on himself has paid off handsomely. Tesla’s market capitalisation soared past the $650 billion target in 2020, and the company has consistently exceeded earnings expectations. With the vast majority of the revenue milestones also achieved, Musk has earned almost all of his potential stock options.
