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Tesla shareholders have backed a record-breaking pay package for boss Elon Musk and approved a plan to move the firm’s legal headquarters to Texas.<\/b><\/p>\n
The results are a victory for the billionaire, who had campaigned fiercely for the payout, which is worth up to $56bn – the exact amount depends on the Tesla share price.<\/p>\n
“Hot damn, I love you guys,” he told a crowd of enthusiastic shareholders who had gathered in Texas for the firm’s annual meeting.<\/p>\n
The eye-popping sum had sparked criticism and raised concerns that the board of the company was too submissive and close to Mr Musk. <\/p>\n
A judge in Delaware voided the package earlier this year, siding with a small investor who had sued over the deal.<\/p>\n
The fight over the plan had aired concerns about Mr Musk’s leadership, at a time when the firm’s share price has fallen from its height and its position in the electric car industry is under pressure.<\/p>\n
But Mr Musk rallied his fan base in support of the deal, appealing particularly to individual investors, who make up an unusually large portion of the firm’s shareholder base.<\/p>\n
“It’s a pretty ringing endorsement,” said car industry analyst Karl Brauer.<\/p>\n
Mr Musk got more than enough shareholder support “to justify the package,” he added.<\/p>\n
The company did not immediately disclose the margin of the vote. <\/p>\n
Mr Musk had previewed the results in a post on his social media company, X, formerly known as Twitter.<\/p>\n
Shares in the company closed up nearly 3% after Mr Musk’s announcement.<\/p>\n
Analyst Dan Ives of Wedbush Securities said the gains signalled confidence from investors that the deal would go through, diminishing the threat that Mr Musk might leave the company.<\/p>\n
“In a nutshell, if this proposal went south a lot of bad things and scenarios could have happened including Musk beginning a path to not being CEO of Tesla,” he wrote in a note. <\/p>\n
The compensation plan gives Mr Musk rights to roughly 300 million shares \u2013 a roughly 10% stake in the firm – as a reward for the firm meeting goals once considered unfeasible, like becoming a $650bn firm.<\/p>\n
“My understanding is that there’s been about 1,100% appreciation in Tesla stock. And that’s pretty, pretty impressive. Most CEOs have never done anything like that,” said Mr Brauer.<\/p>\n
The vote is not binding and legal experts have said it is not clear if a court that blocked the deal will accept the re-vote and allow the company to restore the pay package.<\/p>\n
“The vote changes nothing,” said Mathieu Shapiro, a managing partner at law firm Obermayer Rebmann Maxwell & Hippel.<\/p>\n
“It only offers Tesla opportunities to try to use the vote to obtain a better decision going forward,” he added.<\/p>\n<\/div>\n
In the ruling earlier this year, Judge Kathaleen McCormick ruled the sum was “unfair” and the process for determining the package, by a board dominated by Mr Musk, was “deeply flawed”.<\/p>\n
Tesla called the decision “fundamentally unfair, and inconsistent with the will of the stockholders”.<\/p>\n
The company then submitted the deal to another vote – and asked its shareholders to back a plan to reincorporate the company outside the state of Delaware.<\/p>\n
The board said Mr Musk deserved the package because Tesla achieved its ambitious targets under his leadership and that it was necessary to ensure he remains dedicated to the company.<\/p>\n
Tesla executives also expressed support for the package in social media posts, saying that Mr Musk is crucial to the company’s success. <\/p>\n
Meanwhile, Mr Musk promised a personal tour of Tesla’s factory in Texas to some shareholders who cast votes.<\/p>\n
The package – worth an estimated 300 times what the top-earning boss in the US made last year – won backing from 73% of shareholders who voted six years ago. <\/p>\n
Shareholders also approved the re-election of two board members at the meeting on Thursday: James Murdoch, the son of media tycoon Rupert Murdoch, and Mr Musk’s brother Kimbal Musk.<\/p>\n<\/div>\n