Elon Musk wins approval from shareholders for record $56bn pay deal

Elon Musk has claimed Tesla shareholders are voting by a wide margin to approve a compensation package for him worth about $45bn in the run-up to the electric carmaker’s crunch annual general meeting. The pay package, which is the highest ever awarded to the chief executive of a US company, is subject to an investor ballot after it was thrown out by a US judge earlier this year. Shareholders will also vote on Musk’s proposal to move the legal base of the electric carmaker to Texas. A number of investors, including Norway’s sovereign wealth fund and the California State Teachers’ Retirement System, have already indicated they will reject the pay package. However, on Wednesday evening Musk suggested investors were voting in overwhelming numbers to approve the pay package, along with the move to Texas. Under the pay plan, Musk had been eligible for as much as $55.8bn in stock options if Tesla hit certain milestones, which the company reached. However, after a decline in the share price the current value of those options is closer to $45bn. Even if the pay package is approved, Musk is likely to face further hurdles, including the possibility of further litigation. Shareholders say the billionaire should receive the biggest compensation package in history. In results announced at Tesla’s annual general meeting, shareholders voted in favour of the pay package, although Mr Musk could still face legal battles over it. This pushed the shares in Tesla up by as much as 7pc to hit a two-month high. Approval for the huge pay deal – the largest in history for a US chief executive – is a significant win for both the billionaire and the company, which has seen its share price fall 60pc from its 2021 peak amid slowing EV sales. Dan Ives, analyst at investment firm Wedbush, described the outcome as a “pop the champagne moment for Musk and Tesla shareholders”. He added: “In a nutshell, if this proposal went south, a lot of bad things and scenarios could have happened - including Mr Musk beginning a path to not being chief executive of Tesla.” The incentive package was originally approved by shareholders in 2018 but was struck down in January by a judge in Delaware, who said investors were not fully informed of key details. Influential advisory firms Investor Shareholder Services (ISS) and Glass Lewis both came out against the windfall, with the former dismissing the proposal as “excessive”. Major investors, including Norway’s sovereign wealth fund, also said they would vote against the pay deal. The Tesla chief also threatened to quit if investors did not approve his pay. Supporters of the deal included Scottish investment giant Baille Gifford and Ron Baron, a long-time Tesla investor, who said in an open letter that there would “be no Tesla” without Mr Musk. Under the plan, Mr Musk was eligible for as much as $55.8bn in stock options if Tesla hits certain milestones, which the company has reached. Investors also approved other proposals, including the move of its legal headquarters from Delaware to Texas, as well as the re-election of Mr Musk’s brother Kimbal and James Murdoch, son of media mogul Rupert Murdoch, as board members.