📣 Elon Musk's Pay Package Receives Official Approval
posted 14 Jun 2024
Tesla shareholders have approved a $56 billion compensation package for CEO Elon Musk. The decision came despite concerns from some institutional investors and proxy firms. Musk himself confirmed the positive vote outcome yesterday, though detailed results are expected to be released soon.
Brian Quinn, a professor at Boston College Law School, noted that the pay package must now receive formal approval from a Delaware court, despite the company's legal office's relocation to Texas. He pointed out that Musk's potential influence on shareholders could still be grounds for reversing the decision.
Jason Schloetzer, a business professor at Georgetown University, criticized the investors' decision, arguing they overlooked fundamental human risks and made the company excessively dependent on Musk. Moreover, the move to Texas is seen by some as a questionable strategy for solving internal issues due to the state's weaker corporate governance laws.
So, it's kind of funny that they've taken this approach of 'Delaware stopped us from doing what we want. We're going to move to Texas. Texas law on corporate governance is not anywhere near as developed as Delaware's. Nobody's is, and most states as a kind of first instinct look to Delaware law to figure out how to handle corporate governance issues,said Mathieu Shapiro, managing partner at OBERMAYER.
Tesla board chair Robyn Denholm had previously advocated for the pay package, suggesting that Musk might otherwise leave the company. She justified the necessity of the bonus by stating it was merely a formal recognition of Musk's leadership, not just a financial incentive.
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