Tesla Votes on Elon Musk's Salary!

Tesla Shareholder Meeting Expected

Tesla shareholders will decide on Thursday whether to approve a payment to CEO Elon Musk of up to $878 billion, the highest ever in history. This high-profile vote is just one of several proposals that could shape the future of the electric vehicle manufacturer. The voting results will be announced at the annual general meeting held at the company's Austin, Texas factory.

The approval of this payment would signify confidence in Musk's leadership and support for his vision to transform the company into an artificial intelligence and robotics giant. However, a rejection could lead to confusion.

Key Proposals

For Musk's proposed compensation package to be approved, Tesla must achieve certain profitability and operational targets, including delivering 20 million vehicles over the next decade and operating a million robotaxis on the roads. Additionally, Tesla is expected to see its stock value rise to new levels. The company, currently valued at $1.5 trillion, needs to reach a range between $2 trillion and $8.5 trillion.

The approval of the compensation package is expected, as Musk holds approximately 15% of the voting rights. In the past, he did not use his shares for compensation-related votes due to the company's incorporation in Delaware, but the company has since moved to Texas. Supporters argue that Musk's goals are very ambitious, and if achieved, investors could profit.

However, some large investors, such as Norway's sovereign wealth fund, and other consulting firms oppose the package, finding it excessive. Tesla management has indicated that if the compensation package is not approved, Musk may resign.

Musk's previous compensation package is currently stuck in Delaware courts. Investors will also vote on a proposal that would allow him to receive a replacement package if the court rejects his previous plan.

xAI Investment

Investors will also consider whether to invest in Musk's artificial intelligence initiative xAI. Musk has publicly stated that Tesla should support this company. However, management does not support this plan. Investors will need to decide whether such a partnership would contribute to Tesla's AI goals or exacerbate conflicts of interest among Musk's companies.

Supermajority Voting

Shareholders will also vote to change Tesla's supermajority voting requirement to a simple majority standard. Tesla has faced several failures in attempts to remove the supermajority voting rule. Binding proposals made in 2019, 2021, and 2022 did not achieve the two-thirds vote required for approval.

Some investors are concerned that lowering the threshold could enhance Musk's influence within the company. The outcome will reflect how willing shareholders are to reshape Tesla's corporate governance.

Political Neutrality

Investors will also vote on a shareholder proposal for Tesla to adopt an official political neutrality policy. This proposal would prohibit the company from engaging in political activities and assign oversight to a board committee. Tesla executives oppose this plan, stating that existing policies are sufficient. This proposal aims to test investor sentiment regarding Musk's public stances and the reputational risks they bring. Musk has alienated some consumers due to his connections with former U.S. President Donald Trump.