The shareholder proposal was approved with a support rate of 72%, and restored.$Tesla (TSLA.US)$CEO Elon Musk's compensation plan has been reinstated with a support rate almost identical to that of 2018.

Although the voting results were not close, they did encourage more shareholder participation.

Last Thursday, shareholders voted to restore Musk's 2018 compensation plan, which grants him about 300 million shares of incentive stock options. Earlier, due to insufficient disclosure, a judge in Delaware canceled the agreement in January, making this vote particularly important.

Despite new disclosure, Musk's addition of business such as X and xAI, and Tesla's slowing growth, the outcome of the second vote was not surprising.

Tesla (TSLA.O) reported the final vote result last Friday. About 1.35 billion shares supported the reinstatement of Musk's compensation plan, while 529 million shares voted against. The shareholder proposal was passed with a support rate of about 72%.

The first proposal was passed with a support rate of 73%. Although the results were almost the same, the second shareholder participation rate was higher.

In the first shareholder vote, only about 86 million shares, or about 51% of the issued shares, participated in the vote, while nearly 60% of the shares participated in the vote this time. (At present, Tesla has about 3.2 billion shares issued, and the company has split its shares twice since 2018.)

More people voted against, but more people also voted in favor. In the first vote, about 14% of the issued shares voted against the proposal, while almost 17% of the shares voted against it this time.

As for the approval rate, about 42% of the issued shares in 2024 voted in favor, while it was 37% in 2018.

More votes helped Musk win back his compensation plan—to some extent. Regardless of how investors analyze the data, the voting results were not surprising. If the participation rate does not change, a 51% support rate and 17% vote against would still easily pass the proposal.

For investors, the message is clear: Tesla shareholders want Musk to continue to lead the company.

There are good reasons for this. Although Tesla is facing headwinds, its stock price has risen about tenfold over the past six years.

This growth is the reason why Musk's options are worth so much. Musk does not receive compensation in cash. Investors actually give him 10% of the market value change, from $50 billion to $550 billion.

Tesla's stock rose only about $2 in the past week. Many investors expected a bigger increase. One explanation is that most investors believed the compensation plan would easily pass. And in fact, it did.

Edited by Jeffrey