The shareholders of Tesla, Elon Musk's pioneering electric car manufacturing company, gave a clear indication of their support for the founder's direction of the company.
Tesla shareholders voted on Thursday to reinstate his record-breaking USD 44.9 billion compensation package, which had been dismissed by a Delaware judge earlier in the year.
The fact that the vote was in favor does not guarantee that Musk will receive full stock compensation in the near future. As Tesla shareholders attempt to overturn the Delaware judge's rejection of this compensation package for Elon Musk, the package is probably going to be stuck in the Delaware Chancery Court and Supreme Court for months to come.
However, Musk gave investors comfort at the company's annual meeting on Thursday in Austin, Texas, by telling them he won't be selling any stock as part of the compensation package for the next five years.
He started with saying, "Hot Damn! I Love You Guys" to shareholders in the annual shareholders meeting at Austin, Texas, which is also going to serve as headquarters for Tesla,Inc.
He remarked, "It's not really cash, and I can't cut and run, nor would I want to."
The company stated that shareholders voted in favor of Musk's compensation plan, which was first approved by the board and stockholders six years ago. The vote totals on Musk's pay were not immediately disclosed.
Compensation Package Worth
In a regulatory filing from April, Tesla last estimated the package's value at USD 44.9 billion. Its value has decreased along with Tesla's stock, which has lost roughly 25 per cent of its value so far this year. Previously, it was worth up to USD 56 billion.
In a ruling made in January in response to a shareholder lawsuit, Chancellor Kathaleen St. Jude McCormick found that Musk effectively had control over the Tesla board at the time the package was approved in 2018 and that the board did not fully inform the shareholders about where the approval came from at the time.
Tesla revealed earlier on Thursday that a sizable majority of shareholders were endorsing Musk's compensation package. As a result, by the time the markets closed, the company's shares had increased by 3 per cent, and closed around the USD 182.47 on US bourses.
