East Africa News Post

Complete News World

Tesla investors’ vote on Elon Musk’s pay package is about more than just their money

Tesla investors’ vote on Elon Musk’s pay package is about more than just their money

Tesla begins voting to ratify Elon Musk’s 2018 compensation package. (Reuters/Gonzalo Fuentes/File)

even if Contributors to Tesla company Vote this week to approve $56 billion CEO compensation package Elon MuskThe judge’s decision to invalidate the 2018 compensation agreement is unlikely to be reversed.

This is because Vote June 13 It has more symbolic weight than legal force. The approval of Contributors I can help Tesla With appeal or reconsideration of a new case, but the January trial judge’s decision cannot be overturned Kathleen St. Jude McCormickAccording to some jurists.

“People think this is like direct democracy, if they vote yes to re-certify the employee compensation plan Which colorit will be corrected Counselor McCormick,” He said Christina SutterProfessor of Law at Southern Methodist University in Dallas. “But this is unprecedented.”

Tesla He called the vote as part of an unusual legal strategy. Look for redundancy to correct defects in the process when Contributors Reward approved musk Six years ago. In his ruling, McCormick He cited board members’ conflicts of interest and the company’s failure to adequately disclose the terms of its executive compensation plan.

he The automaker is betting on the Delaware Supreme CourtWhich will consider any appeal of the ruling mccormick, They have a positive view on Investors Re-ratification of the agreement. However, Tesla in its dealership alluded to the fact that it cannot guarantee a successful outcome.

“We cannot predict with certainty how we will vote to approve reparations musk By law Delaware In these new circumstances, the company wrote.

See also  UberEats will be integrated into the Supplemental Nutrition Assistance Program (SNAP)

Win or lose, musk And Tesla They can’t even file an appeal McCormick Determine the legal fees in the case and issue the final ruling.

The clearest and most immediate effect The vote on Musk’s compensation is that it could strengthen or weaken the billionaire’s influence in the company. As of June 7, shares rose Tesla They are down 29% this year amid growing competition for electric vehicles and slowing sales, and the vote is widely seen as a referendum on his leadership.

Glass Lewis & Co., Inc Institutional shareholder servicestwo of the agent’s leading advisors, recommended that Contributors Rejected compensation package International Space Station He called it “excessive from the beginning” and said it failed to achieve some of the goals set by the board.

The June 13 vote carries more symbolic weight than legal weight for Tesla. (Reuters/Mike Blake/File)

The award is seen as a means of preservation Musk’s approach in Tesla. Since 2018, he has sold shares Tesla To buy sformerly known as TwitterAnd it was founded xAISo he now oversees six companies. It has threatened to create more AI products outside the automaker if it cannot increase its stake in Tesla to 25%, from about 13% currently.

“What we realized in 2018 and still realize today is that one thing Which color “You certainly don’t have unlimited time,” the board chairman wrote, Robin DenholmIn a letter to shareholders last week. “You also have no shortage of ideas and other places where you can make an amazing difference in the world. We want those ideas, that energy, and that time to be there.” TeslaFor your benefit, our friends. But this requires mutual respect.”

See also  Woman attacks Chipotle employee with burrito; They punish her with an unprecedented punishment by putting her in her place News from Mexico

Denholm He was courting the greats Institutional investors In the days before the vote. Tesla She also offered an exclusive tour of the factory with musk As a potential prize for Contributors Who can prove that they voted.

Zohar GoshenMr Columbia Law School Which deals with issues companies lawsHe said the launch would replicate the payment approval process musk It is a suitable way to correct defects that McCormick It was decided to keep the billionaire attached Tesla.

“The court ruled that Tesla Not properly approving a compensation package in 2018 does not mean that musk “He is not entitled to any compensation for the last six years of service,” he wrote. Goshen In an opinion article on Bloomberg Law.

In 2018, 73% of Tesla shareholders Those who cast their votes approved the compensation plan musk. Voting website. Tesla“Created by the company argues that Contributory democracy At stake, he said: “We do not believe that the opinion of a single judge should be able to overturn the decisions of millions of our citizens.” Contributors“.

Tesla and Musk cannot file an appeal until McCormick’s final ruling. (Reuters/Tingshu Wang/Archive)

In addition to compensation muskthe Contributors They will also vote on the proposal Tesla To move Jurisdiction to Texas from Delaware. Tesla Already located in AustinThe company says it’s time to “make our business our legal home.”

Charles Elsonretired professor University of Delaware Who founded Weinberg Center for Corporate Governance From school, he said Texas courts May have a more positive view of Musk compensation planBut this vote is unlikely to influence judges Delaware.

See also  Bitcoin crashes again after the announcement in China

“I do not agree at all with the position Tesla That all the problems in the process of creating Mr. musk “It can be erased by some kind of repetition.” Elsonwho filed an amicus curiae brief in the compensation case musk. “The only way the new vote matters is if Tesla managers decide to start the process over in a new state.

(c) 2024, Bloomberg