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Tesla CEO Musk's pay package gets support from 77% of votes at investor meet

The filing did not break down the vote based on the type of investor, but it underscored the support that Musk enjoys from retail investors, many of whom are fans of the mercurial billionaire.
Last Updated : 14 June 2024, 11:45 IST

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San Francisco: Elon Musk's $56 billion pay package won an overwhelming 77 per cent of votes cast by Tesla investors at its annual meeting, a company filing showed on Friday, despite vocal opposition from a number of institutional investors and proxy advisory firms.

The filing did not break down the vote based on the type of investor, but it underscored the support that Musk enjoys from retail investors, many of whom are fans of the mercurial billionaire.

Shares rose 1 per cent before the bell Friday, after rallying nearly 3 per cent in the previous session following a Musk post ahead of the vote that said the package was being approved by "wide margins".

Investors holding 1.76 billion shares voted in favour of the pay package, which is the largest in US corporate history, while 528.9 million shares voted against and 20.6 million shares abstained, Friday's filing showed.

In 2018, 73 per cent of Tesla investors had voted in favour of the same pay package, which was voided by a Delaware judge this year.

The approval does not, however, resolve a lawsuit on the pay package in a Delaware court, which some legal experts said could stretch out for months. The judge invalidated the pay in January, describing it as "unfathomable".

"Absolutely not (the end of legal matters). I think voting on the package after it was overruled by the court is a fairly unprecedented move. I don't think this automatically invalidates what the judge did the first time around January," Mathieu Shapiro, Managing Partner at law firm Obermayer said.

The proposal to reincorporate Tesla in Texas from Delaware received about 84 per cent of votes, excluding those of board members Elon and Kimbal Musk, a step some analysts said might encourage other companies also to shift.

Investors also passed proposals with about 53 per cent voting, including abstained votes, in favour of shortening board terms to one year and lowering voting requirements for proposals to a simple majority, despite board opposition to both.

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Published 14 June 2024, 11:45 IST

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