Tesla shareholders asked to back $56bn pay for Elon Musk rejected by judge

Anthony France
·2 min read
(PA)
(PA)

Elon Musk’s Tesla will ask shareholders to reinstate his $56 billion compensation package rejected by a judge in Delaware who called it too excessive.

In a filing with federal regulators early Wednesday, the company said it would also seek their approval on moving the electric car maker’s corporate home from the state to Texas.

Both issues will be voted on during its annual meeting on June 13.

In January, Chancellor Kathaleen St Jude McCormick ruled that Musk is not entitled to “an unfathomable sum” - the largest pay package in corporate America - that was unfair to shareholders.

Awarded by Tesla’s board of directors, it is potentially worth about $55.8 billion (£44.8 billion) over 10 years starting in 2018.

Billionaire Musk, 52, is chief executive of Tesla and social media giant X, formerly Twitter.

Tesla’s request for a new vote is an apparent attempt to bolster support and serve as a public rejection of the court’s decision, which can be appealed.

Chairperson Robyn Denholm wrote in a letter included with the filing: “We do not agree with what the Delaware court decided, and we do not think that what the Delaware court said is how corporate law should or does work.”

She told shareholders this week: “Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value.

“That strikes us - and the many stockholders from whom we already have heard - as fundamentally unfair, and inconsistent with the will of the stockholders who voted for it.”

On Monday, Tesla told staff it plans to lay off more than 10 per cent of its global workforce, around 14,000 jobs.

It comes after Tesla indicated it has seen a decline in vehicle deliveries over the first quarter of 2024, representing its first fall for four years.

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