The approval underscores the steadfast support Musk commands from Tesla’s retail investor base, a considerable number of whom are outspoken admirers of the visionary billionaire.
Tesla shareholders gave the green light to CEO Elon Musk’s $56 billion compensation package, the electric vehicle-manufacturer announced on Thursday, signaling strong confidence in his leadership and offering incentive for maintaining focus on the company’s primary revenue stream.
At its annual shareholder meeting in Austin, Texas, Tesla also received approval to relocate its legal headquarters from Delaware to Texas. Musk had hinted the night before that these proposals were receiving significant support and expressed gratitude to shareholders. A chart shared on his social media platform X indicated overwhelming support for the resolutions. This endorsement further underscores Musk’s popularity among Tesla’s individual investors, many of whom ardently support the enigmatic billionaire.
Despite opposition from some major institutional investors and proxy firms, the proposal passed. However, legal challenges may still lie ahead, particularly since a Delaware judge invalidated the package earlier in the year, describing it as “unfathomable.”
The approval of the compensation package not only validates Musk’s leadership but also signifies investors’ reluctance to jeopardize the company’s future. Musk had previously threatened to pursue AI and robotics ventures outside of Tesla if he couldn’t secure enough voting control, which effectively necessitated the approval of the 2018 pay package. This move toward autonomous technology has raised concerns among some investors, who fear its complexity and potential diversion of resources from mass-market electric vehicles.
While Tesla’s stock has experienced a significant decline from its 2021 peak, closing up 2.9% on Thursday, the endorsement of Musk’s compensation package indicates a confidence in his ability to steer the company through its challenges. However, concerns persist about his expanding responsibilities beyond Tesla, with the approval suggesting shareholders believe he remains pivotal to the company’s future success.
