Tesla shareholders approved CEO Elon Musk’s $56 billion pay package, the electric vehicle-maker said on Thursday, a big thumbs-up to his leadership and an incentive to keep his focus on his biggest source of wealth. The approval underscores the support that Musk enjoys from Tesla’s retail investor base, many of whom are vocal fans of the mercurial billionaire. The proposal passed despite opposition from some large institutional investors and proxy firms.
“This thing is not over,“ said Brian Quinn, a professor at Boston College Law School. The Delaware judge will scrutinize the vote and require Tesla to prove the process was not coerced or improperly influenced by Musk, he said. The judge had criticized Tesla’s board as “beholden” to him, saying the plan was proposed by a conflicted board with close personal and financial ties to its top executive.
Shareholder approval for the compensation serves as both an endorsement of Musk’s tenure and an acknowledgment that investors do not want to risk the company’s future. “Shareholders once again endorsed the terms of the contract, sending a strong signal that ‘a deal is a deal’ and Musk deserves to be rewarded for meeting the lofty thresholds of an entirely incentive-based contract,“ said Garrett Nelson, analyst at CFRA Research.
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