TESLA will have shareholders vote again on its compensation package for Elon Musk after a Delaware court voided the US$56 billion award arranged for the chief executive officer in 2018.
In its proxy filing issued on Wednesday (Apr 17), Tesla also said it will call a vote on moving the company’s state of incorporation to Texas from Delaware. The electric-car maker will convene its annual meeting on Jun 13.
Tesla chair Robyn Denholm criticised the Delaware Chancery Court’s January decision, writing in the proxy that it amounted to second-guessing shareholders who had approved Musk’s compensation.
Chief judge Kathaleen St J McCormick described the company’s directors as “supine servants of an overweening master” and said they had not looked out for the best interests of investors.
“Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value,” Denholm wrote.
The shareholder who sued Tesla over the CEO’s compensation criticised it as excessive and opaque.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Musk, who runs six companies, said early this year he preferred to work on artificial intelligence and robotics products elsewhere unless he owns a 25 per cent stake in Tesla. He now owns about 13 per cent of the company.
Tesla shares rose 1.1 per cent as of seven am New York time, before the start of regular trading. The stock tumbled 37 per cent this year through Tuesday’s close. BLOOMBERG
