It Looks Like Elon Musk Won the Shareholders Vote to Reinstate His Pay

AP Photo/Ebrahim Noroozi

As you may have heard, back in January a judge in Delaware tossed out Elon Musk's pay package which, at the time, was valued at $55 billion. This deal was agreed to in 2018 and it was not a deal in which he was paid cash for work done. Instead it was an incentive deal which would reward him with a percentage of the company's stock based on meeting certain metrics. Under Musk, Tesla met all of those milestones.


The plan called for Musk to reap billions if Tesla, which is based in Austin, Texas, hit certain market capitalization and operational milestones. For each incidence of simultaneously meeting a market cap milestone and an operational milestone, Musk, who owned about 22% of Tesla when the plan was approved, would get stock equal to 1% of outstanding shares at the time of the grant. His interest in the company would grow to about 28% if the company’s market capitalization grew by $600 billion.

Each milestone included growing Tesla’s market capitalization by $50 billion and meeting aggressive revenue and pretax profit growth targets. Musk stood to receive the full benefit of the pay plan, $55.8 billion, only by leading Tesla to a market capitalization of $650 billion and unprecedented revenues and earnings within a decade.

Tesla has achieved all twelve market capitalization milestones and eleven operational milestones, providing Musk nearly $28 billion in stock option gains, according to a January post-trial brief filed by the plaintiff’s attorneys. 

Despite meeting all of these goals, a small time stockholder filed a lawsuit arguing that the pay package should be voided


[Richard] Tornetta — who manned the drumkit for Philadelphia-based thrash band Dawn of Correction — was the single shareholder plaintiff named on the suit, filed in 2018, according to The Wall Street Journal.

Tornetta — who also named several Tesla directors in his lawsuit, and reportedly held just nine shares of the electric vehicle-maker at the time of the filing — played the skins for Dawn of Correction from when the group formed in 2005 until its split in 2007.

In January Chancellor Kathaleen St. Jude McCormick ruled in favor of Tornetta, voiding the pay plan on the grounds that Tesla had not properly informed shareholders.

“Swept up by the rhetoric of ‘all upside,’ or perhaps starry eyed by Musk’s superstar appeal, the board never asked the $55.8 billion question: ‘Was the plan even necessary for Tesla to retain Musk and achieve its goals?’” McCormick wrote.

In response, Tesla decided to put the pay package up for a vote (again). This way it would be clear how the shareholders felt about the issue even after the judge's ruling. Tesla is also pushing to re-incorporate its business in Texas, moving it out of Delaware. The company has been campaigning for these two resolutions and last night Musk released some graphs suggesting that both of them were going to win.


Shareholders are allowed to make or change votes up to the conclusion of the annual shareholder meeting which is taking place in Texas as I write this. So the final tally isn't known yet but it seems probable both items will pass.

However, Musk's decision to share voting results before the vote was over is also now getting attention. This morning the company filed a notice with the FEC including Musk's tweets.

In a filing with the U.S. Securities and Exchange Commission on Thursday, Tesla published Musk’s own posts late Wednesday on X, the social media platform he owns, with charts that appeared to show that shareholders were in favor of his compensation package, as well a measure to move Tesla’s legal home from Delaware to Texas...

Legal experts say that releasing vote totals while balloting is in progress could present problems for Tesla, and that may be why the company made the filing with the SEC, which is likely to look into the matter.

Even if Musk wins both of these votes, the court in Delaware could, in theory, overturn the vote once again, but it should be more difficult this time around to claim that shareholders didn't know what they were voting for as this has been everywhere in the news for months.


Musk just started speaking at the shareholder event and was clearly worked up. "Hot damn I love you guys," he said as he started his talk. Here's the full event if you're interested. Musk's appearance starts about 45 minutes in.

Update: I missed this initially but about 41 minutes in they announced the result of the voting. Musk's pay was approved and so was the "redomestication" from Delaware to Texas. No wonder Elon was in such a good mood.

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