Tesla shareholders have restored a massive pay package to CEO Elon Musk that has been estimated to be worth almost $45 billion.
The billionaire entrepreneur and owner of social media platform X had remained assured that shareholders would approve the payout which was denied to him by a Delaware judge in January.
The restoration of the $44.9 billion package was confirmed at Tesla’s 2024 annual shareholders meeting on Thursday, with the news greeted by a standing ovation and chants of “Elon, Elon, Elon.” Vote totals were not immediately announced.
Following the announcement, Musk bounded onto the stage to address the shareholders. “I just want to start off by saying, hot damn, I love you guys,” he said, before promising that the company would soon be delivering “mind-blowing change.”
“We’re not just opening a new chapter for Tesla, we’re starting a new book,” he said.
Earlier on Thursday, shares of the electric vehicle company rose after Tesla said in a regulatory filing that indicated that stockholders would vote to approve the package by a wide margin.
In a filing with the US Securities and Exchange Commission (SEC) on Thursday, Tesla published Musk’s own posts on X with charts that appeared to show that shareholders were in favor of his compensation package.
The charts also appeared to show shareholder approval of a move of Tesla’s legal home from Delaware to Texas. This was also approved by shareholders on Thursday.
However, the favorable vote on the pay package restoration does not mean Musk will get the all-stock compensation anytime soon. The package is likely to remain tied up in the Delaware Chancery Court for months as Tesla appeals the rejection.
Back in January, Chancellor Kathaleen St Jude McCormick determined that Tesla deceived shareholders when the all stock compensation was approved in 2018, so Musk was not entitled to the landmark pay package. Tesla has said it would appeal the decision.
Speculation about the future of the company swirled prior to the vote, with suggestions that Musk may choose to deliver on threats to take artificial intelligence research to one of his other companies or he could even walk away, should his payout be denied.
The tech boss has threatened on X to develop AI elsewhere if he doesn’t get a 25 percent stake in Tesla. His xAI recently received $6 billion in funding to develop artificial intelligence.
However, even though it has now been approved, analysts have said there may still be uncertainty. “This issue has been an overhang on Tesla’s stock, and this will be important to move this distraction in the rearview mirror,” said Wedbush Analyst Dan Ives, in a note to investors.
Shares of Tesla Inc. have slumped this year with the company warning of “notably lower” sales growth in 2024.
