Earlier this year, a Delaware judge voided a $56 billion pay package for CEO Elon Musk on the grounds that because he effectively controlled the board, the payout was unfair to stakeholders. Now, Musk’s company Tesla is requesting that shareholders re-approve the payout and move company headquarters to Texas.
The pay package was first approved in 2018 and will now go back to shareholders on June 13’s annual meeting. However, with falling sales, tumbling stock prices and slowing EV demand, another authorization is less of a sure thing this time.
Board Chair Robyn Denholm said Wednesday in a letter to shareholders that Musk fulfilled his obligations, with Tesla achieving the stock value and operational targets approved in the 2018 package. Tesla plans to appeal the decision.
“Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value,” said Denholm. “That strikes us—and the many stockholders from whom we already have heard—as fundamentally unfair, and inconsistent with the will of the stockholders who voted for it.”
