Elon Musk Promotes Special Deal for Tesla Shareholders on Voting Day

Tesla navigates legal challenges, seeks new corporate direction

by Zain ul Abedin
Elon Musk Promotes Special Deal for Tesla Shareholders on Voting Day
© Apu Gomes/Getty Images

Tesla, under the stewardship of CEO Elon Musk, is courting its shareholders with a unique proposition as they gear up to vote on reinstating Musk's formidable $56 billion compensation package. In a strategic move to encourage shareholder participation, Tesla is offering a chance to win a tour of its expansive Gigafactory in Austin, Texas, guided personally by Musk alongside Tesla Chief Designer Franz von Holzhausen.

The exclusive tour, set for June 12, promises an intimate peek into the manufacturing lines of Tesla's Cybertruck and Model Y. Additionally, the lucky winner will secure a reserved seat at the Tesla annual stockholders' meeting the following day, where final voting will take place.

Notably, shareholders have the flexibility to cast their votes online prior to the event. Tesla emphasizes the impartial nature of this contest, stating, "Shareholders need only prove participation in the voting process, irrespective of their stance on the proposals." Eligibility for the draw requires being a registered shareholder or beneficial owner as of April 15 and submitting proof of vote by the June 7 deadline.

Delaware Ruling Fallout

The move follows a January decision by a Delaware judge, which nullified Musk's prior compensation agreement due to inadequate disclosure of board members' connections to Musk and the pre-fulfillment of many set performance benchmarks.

This ruling has prompted Musk to advocate for relocating Tesla’s incorporation from Delaware to Texas, a proposal also up for shareholder voting. Amidst this backdrop, Tesla's website has actively campaigned for shareholder votes, defending the initial approval of Musk's compensation in 2018 which led to a staggering 1,100% total shareholder return under his leadership.

The company argues that Musk’s "all or nothing" compensation structure, which includes no salary or cash bonuses and incentives tied solely to significant market value milestones, is crucial for sustaining Tesla’s growth trajectory.

Despite the board's recommendation for reinstatement of the original pay plan, proxy advisory firm Glass Lewis has advised shareholders to oppose it, citing its excessive size and the potential impact of Musk’s option exercises on the company’s ownership structure.

Furthermore, Musk's extensive commitments, including roles at X (formerly Twitter), SpaceX, xAI, Neuralink, and The Boring Company, compound concerns about his capacity to effectively manage Tesla's expansive agenda.

Elon Musk