Elon Musk, the CEO of Tesla, has recently been granted a substantial pay package amounting to $56 billion. This decision follows a re-vote by Tesla shareholders during their annual meeting held in Texas. The need for this re-vote stemmed from a legal challenge initiated by a small investor, prompting a Delaware judge to criticize the package as “unfathomable.” Earlier in January 2024, a Delaware court had invalidated the package, leading to this reconsideration.
In conjunction with this announcement, Musk disclosed Tesla’s intention to relocate its legal headquarters from Delaware to Texas. While this move has sparked concerns regarding the perceived subservience of Tesla’s board to Musk, it has also raised questions about the implications of such a shift.
Despite shareholders’ renewed approval of the pay package, it’s important to note that this vote is not legally binding. There is uncertainty among legal experts regarding whether the court will uphold this new vote, given the previous ruling against the compensation plan. Originally sanctioned in 2018, the fate of the $56 billion compensation plan remains uncertain amidst ongoing legal challenges.