Five months after a Delaware judge ordered Tesla to revoke CEO Elon Musk's massive 2018 pay plan, citing illegal board approval, shareholders of the firm voted on Thursday to approve it.
The vote in favor of the compensation plan at Tesla's annual meeting in Austin, Texas, gives Musk a boost in the media and may aid in his attempts to persuade a judge to grant him his performance options in the future.
However, it does not overturn the court's decision.
Previously, the value of the pay package could have reached up to $56 billion in Tesla stock. A Delaware judge deemed the compensation "unfathomable" in January. Judge Kathaleen McCormick concluded that Tesla's board members were not impartial toward Musk, that they did not appropriately engage in negotiations with the CEO at arm's length, and that they omitted information from shareholders prior to putting their vote on his compensation plan.
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In regular trading on Thursday, Tesla shares increased 2.9% to settle at $182.47 following Musk's post on X indicating that the proposal was expected to be approved. As a result of growing competition in China and dwindling sales of its outdated electric vehicle selection, Tesla's stock is still down 27% for the year.
Final votes on twelve proxy proposals were held during the annual meeting.
Among them was Elon Musk's attempt to shift Tesla's incorporation site from Delaware, the state where the majority of large publicly traded businesses are incorporated, to Texas, the state where the automaker has its main U.S. facility. The measure was approved by shareholders' vote.
During the most recent shareholder meeting in May 2023, Musk stated that Tesla will "try out a little advertising" and see how it works, that the economy will improve after a year, and that the company would start producing Cyber trucks in late 2023.
Recent data on inflation and employment suggests some progress. In
addition to promoting throughout the previous year, particularly on X—the
social media platform formerly known as Twitter that Musk purchased for
$44 billion in late 2022—Tesla organized a Cybertruck deliveries event in
late 2023.
But Musk told shareholders at the AGM last year that he would use the app less from now on, referring to the company as a “short-term distraction.”
He continues to devote a lot of time to other pursuits. Musk is the CEO of Neuralink, a firm that makes brain-computer interfaces, and SpaceX.
Additionally, he founded a new business last year called xAI, which has raised billions of dollars to construct massive language models and the AI chatbot Grok, which utilizes X's data and data center capacity.
At the meeting, a jubilant Musk, who describes himself as "pathologically optimistic," assured Tesla shareholders that the company is making such headway in creating "vehicle autonomy," or the systems that allow current Tesla cars to drive themselves, that he thinks they can "10x the value of the company.”
Musk has been teasing this degree of autonomous technology since 2016, but it hasn't materialized. Competitors Pony.ai, Didi, and Waymo have created robotaxis and are currently offering paid services.
Musk stated that the business wants to build a self-driving ridehailing network using Tesla cars, although he did not specify when this would be developed and released.
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"There will be cars that Tesla owns itself, but for our customers' fleet, it will function similarly to Airbnb," he stated. Your vehicle can be added or removed from the fleet at any time.
Musk stated that deliveries of the Cyber truck, which went on sale in late 2023, are increasing. He said that the business shipped 1,300 packages in a week, a record.
Musk pledged that Tesla would test humanoid robots in its own factories the following year and begin "limited production" of Optimus in 2025. He forecast that the business will have "over 1,000, or a few thousand, Optimus robots working at Tesla" by the end of the next year. After the early results were revealed, Musk took the stage and declared, "I simply want to start off by shouting hot d---! I cherish each of you.
