Tesla shareholders have given the green light to Elon Musk’s $56 billion compensation package and the proposal to relocate the company’s incorporation to Texas.
The compensation plan was initially approved by investors in 2018 but was rejected by a Delaware judge earlier this year. Tesla’s stock surged by 2.9% on Thursday. On Wednesday night, Elon Musk announced that both the compensation and incorporation resolutions were likely to pass with a significant majority. Norway’s $1.7 trillion sovereign wealth fund and the California Public Employees’ Retirement System opposed the compensation package.
However, there were influential supporters of the pay package, such as Baron Capital, which owns 17.22 million Tesla shares. Founder Ron Baron recently penned a touching open letter expressing his strong backing for Elon Musk. He emphasized that Elon’s leadership is the reason for Tesla’s success. This powerful show of support was made just ahead of the pivotal vote. Analysts feared that rejecting the compensation proposal could potentially harm Tesla’s business and impact its stock price. Additionally, Tesla shareholders united in agreement with the company’s strategic decision to relocate its incorporation from Delaware to the Lone Star State of Texas.
In 2021, the company decided to relocate its headquarters. The reason for this move was California’s regulatory and tax environment, which Elon Musk criticized. Elon Musk had also criticised Delaware and its court system following the initial ruling on his compensation package.
Tesla’s shares increased by 0.1% to $182.70 in after-hours trading on Thursday. The approval of Elon Musk’s 2018 stock option award by shareholders does not guarantee that he will receive it. The Delaware judge who revoked it still needs to issue her final decision.
