Tesla shareholders may be called upon to vote again on Elon Musk’s proposed $56 billion pay package. On Monday, Tesla submitted documents to allow shareholders to reconsider their approval of Musk’s 2018 pay package.
The submission included a letter from Chairperson Robyn Denholm expressing the Tesla Board’s disagreement with a ruling on Musk’s pay package by the Delaware Court. Denholm emphasized that Musk has not received any compensation for his work at Tesla over the past six years, deeming it fundamentally unfair.
The Tesla Board argues that the Delaware Court’s interpretation of corporate law does not align with their beliefs. They suggested subjecting the original 2018 package to a new shareholder vote, if legally feasible.
Musk’s pay package carries a maximum value of $55.8 billion, with a grant date fair value of $2.6 billion. To achieve the maximum value, Musk must meet all the goals or tranches outlined in the package.
Judge McCormick criticized the substantial amount awarded to Musk in his pay package as “unfathomable.” Nevertheless, Musk successfully achieved all 12 tranches while serving as Tesla’s CEO without a salary during that time.
Some Tesla shareholders argue that the substantial sum is a justified compensation for accomplishing incredibly challenging tasks. For instance, Tornetta, a TSLA shareholder who sued over Musk’s 2018 pay package, expressed readiness to accept the outcome, stating that the structure directly links the award to the created benefit, availing Tesla of tax deductions and avoiding any impact on the company’s balance sheet.