Elon Musk's $1 Trillion Pay Package Approved by Tesla Shareholders
At Tesla's annual shareholders meeting in Austin, Texas, a majority of shareholders approved Elon Musk's $1 trillion remuneration package despite strong opposition from proxy advisory firms like Glass Lewis and Institutional Shareholder Services.
Voting Outcome and Board's Position
The approval saw 75% of shareholders voting in favor of Musk's compensation plan, alleviating concerns from Tesla's board who warned Musk might leave if the proposal was rejected.
Details of the Compensation Package
The package consists of 12 tranches of share grants, awarded as Tesla achieves specific growth milestones over the next decade. These targets include market capitalization goals and operational achievements designed to drive aggressive company expansion.
- Musk's ownership stake would increase from about 13% to 25%.
- This would add over 423 million shares to his holdings.
- The first tranche activates when Tesla's market cap hits $2 trillion (£1.5 trillion).
- Currently, Tesla's market cap is over $1.5 trillion (£1.1 trillion).
- Subsequent tranches depend on increasing the company's valuation by $500 billion (£380 billion) increments.
"The deal is designed to incentivise Musk to steer the company towards aggressive growth milestones over the next decade."
This approval solidifies Musk's compensation framework, aligning his interests with Tesla's long-term performance goals.
Author's summary: Tesla shareholders approved Elon Musk's $1 trillion pay package, tying his rewards to ambitious company growth milestones and significantly increasing his ownership stake.
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