Elon Musk has been the face of Tesla for 20 years as an investor and CEO — but when shareholders do not approve his multi-billion greenback compensation package deal subsequent week, issues might change.
Robyn Denholm, chairperson of Tesla’s board, despatched stockholders a letter on Wednesday urging them to approve Musk’s proposed $56 billion pay on the firm’s annual assembly on June 13.
The compensation package deal, which may very well be the highest in U.S. company historical past, was “clearly not in regards to the cash,” Denholm wrote.
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As a substitute, Denholm framed the difficulty as a method to incentivize Musk to maintain specializing in Tesla.
“If Tesla is to retain Elon’s consideration and encourage him to proceed to commit his time, vitality, ambition and imaginative and prescient to ship comparable outcomes sooner or later, we should stand by our deal,” Denholm wrote.
Tesla CEO Elon Musk. Picture by Christian Marquardt – Pool/Getty Photographs
Musk’s pay package deal was first authorized by shareholders in 2018 and hinged on Musk main Tesla to attain a sequence of income, market cap, and operational milestones.
One aim, for instance, was rising Tesla’s market cap by virtually $600 billion.
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Musk hit the targets and may need obtained his reward earlier this 12 months — however there was a authorized problem. A Delaware choose overturned the pay package deal in January, calling it “an unfathomable sum” and wrote that “the proxy assertion inaccurately described key administrators as impartial and misleadingly omitted particulars in regards to the course of.”
Now Tesla is attempting to maneuver its authorized dwelling from Delaware to Texas and asking shareholders to approve Musk’s pay once more.
The 2 issues will likely be up for vote at Tesla’s annual assembly.
The steered pay would put Musk properly forward of different CEOs. A Monday research from the Related Press confirmed that the highest-paid CEO of a public S&P 500 final 12 months was Broadcom’s Hock E. Tan.
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Tan’s compensation final 12 months, together with base wage, bonuses, and inventory awards, was price about $162 million.
Apple CEO Tim Prepare dinner was third on the checklist with an total compensation of $63 million and Netflix CEO Theodore A. Sarandos was fifth, incomes practically $50 million.
Musk additionally owns X, previously Twitter, and leads SpaceX, Neuralink, and the Boring Firm.
