Source: Caixin.
Tesla will hold its annual shareholder meeting on Thursday and announce the results of shareholder votes on the Musk compensation package and Tesla's registration relocation. The shareholder voting deadline is Wednesday at 10:59 pm Eastern Time and is currently being counted. According to Musk's latest post, these two proposals are being passed by a significant margin.
Tesla shareholders are currently voting on two key resolutions, one regarding CEO Musk's $56 billion compensation package and the other regarding moving the company's registration to Texas.
However, before the official announcement, Tesla CEO Musk has eagerly shared the preliminary results, because victory is almost at hand for him. The deadline for Tesla shareholders to vote was 10:59 pm US Eastern Time on Wednesday (11:59 am Beijing Time on Thursday), and it has ended and is now in the vote counting process. At 3:30 pm US Eastern Time on Thursday (4:30 am Beijing Time on Friday), Tesla will hold its annual shareholders' meeting and officially announce the vote results of these two proposals.
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In his latest post on X, Musk said that the two key proposals regarding the re-approval of his compensation plan and the relocation of Tesla's legal address from Delaware to Texas are currently being passed with a "significant advantage".
The controversial compensation plan was passed by the Tesla board of directors in 2018 but was overturned by a Delaware judge in January of this year. The judge stated that investors did not fully understand the key details. According to the previous plan, if Tesla reaches specific milestones, Musk will be eligible to receive up to $56 billion in stock options, and in fact, the company has already reached these milestones in recent years.
Confidence vote
Legal experts have pointed out that it is unclear whether the court will accept such a non-binding shareholder revote and allow Tesla to restore the implementation of Musk's compensation plan based on the vote results.
Previously, the legal community also expected that even if the compensation package plan was re-passed by the shareholders' meeting, Musk would not immediately receive the reward, but would need to enter a lengthy appeal stage and submit the vote results of the shareholders' meeting as corresponding evidence.
Ann Lipton, a corporate law professor at Tulane University, pointed out that the cancellation of the compensation package plan is related to Tesla's failure to fully disclose information to the board of directors in 2018. Even if the shareholders' meeting now re-votes and passes this plan, its core legal issues still exist. This will also affect the subsequent appeal trial.
Despite this, the voting results can stabilize Musk's management position in Tesla, reflecting investors' confidence in Musk's role as the company's CEO.
Analyst Alexander Potter from Piper Sandler pointed out that this shareholder meeting vote did not completely solve the problem, and Musk's compensation package plan may still be considered illegal. However, Tesla's stock price will respond positively to this news, and
he also pointed out that the rise in Tesla's stock price may not be as great as the decline caused by the option of the compensation package plan being rejected.
Editor / jayden