TSLA - Tesla Motors Inc (NASDAQ)

[JohnDe]

Tesla shareholders voted to reapprove Elon Musk’s multibillion-dollar pay package...Shareholders also voted in favour of moving the company’s legal home from Delaware to Texas, where Tesla has its headquarters and one of its key factories. The board had urged investors to support the move saying that Texas was Tesla’s “home state.”​

Tesla shareholders vote to uphold Musk’s pay plan​

Tesla shareholders voted to reapprove Elon Musk’s multibillion-dollar pay package, signalling support for the EV maker’s longtime leader and giving the board ammunition in its fight to preserve the court-rejected compensation plan.

Approval of the company’s proposal was announced at Tesla’s annual shareholder meeting in Austin, Texas.

The company didn’t provide a percentage breakdown of the vote; in 2018, 73% of the voted shares backed it.

After the results were announced, Musk appeared on stage dancing and thanking shareholders: “I just want to start out by saying, ‘Hot damn, I love you guys.’”

Musk appeared in a jovial mood while he talked through the company’s opportunities for growth with self-driving vehicles and robots. “We’re not just opening a new chapter for Tesla. We’re starting a new book,” he said.

The vote followed an intense campaign by the board and Musk to secure shareholder support, and it had become a referendum on Musk’s future at a company he helped build into an electric-vehicle powerhouse.

Tesla’s board had argued that the pay package — representing a sizeable portion of Musk’s personal wealth — was needed to motivate him to continue to lead the world’s most valuable automaker long term.

Tesla shares were up 1% in after-hours trading following news of the voting. The stock has fallen roughly 27% in 2024.

Shareholders also voted in favour of moving the company’s legal home from Delaware to Texas, where Tesla has its headquarters and one of its key factories. The board had urged investors to support the move saying that Texas was Tesla’s “home state.”

Asking voters to reapprove Musk’s pay package was seen as a gamble for Tesla’s board. The company’s shareholder base has changed since the deal was first approved in 2018, and current holders were being asked to approve pay for past performance, at the same time Tesla was dealing with slowing EV sales and questions about demand for its vehicles.

In a late-night post on X Wednesday, Musk previewed the victory saying the pay-package proposal and another one asking shareholders to move Tesla’s incorporation to Texas were winning by “wide margins.”

The record-setting compensation deal has been criticised for its size and the way it was awarded. A Delaware judge in January ordered the entire plan — now valued at roughly $48bn ($72bn) — rescinded, saying the process was deeply flawed because of Musk’s close ties to several board members. The court also said Tesla had failed to prove that shareholders had been sufficiently informed about the deal.

Shareholder reapproval Thursday doesn’t override the judge’s decision, but it gives Tesla’s lawyers some leverage in challenging the verdict. Tesla is trying to persuade the Delaware court to reverse the ruling, and it also has vowed to appeal the decision.

Legal experts say the company could petition the judge to reconsider her decision, arguing that the court’s concerns were presented to shareholders and they still backed the package.

In a regulatory filing in April, Tesla said it hoped shareholder ratification would resolve concerns raised by the court, including that Tesla failed to adequately disclose important details of the package to investors.

Shareholders approving the plan to move Tesla’s incorporation to Texas from Delaware adds another wrinkle. A new case could be brought against the pay package in Texas, and that case could take precedence if decided before the Delaware appeal plays out.

Delaware Chancellor Kathaleen McCormick, who is overseeing the case, seemed to reject this idea recently. The judge said she interpreted recent communication by Tesla to mean they “do not plan to litigate any matter related to this action anywhere but Delaware.”

Musk’s pay package was challenged in 2018 when Tesla shareholder Richard Tornetta sued the company. Tornetta, who owned nine shares in the company, alleged the chief executive controlled the approval process for his own compensation plan and the board had misled shareholders, who then signed off on it.

Lawyers for Tesla and the shareholder are expected to meet in early July with the judge. The vote has also created new legal challenges for Tesla, including one from a shareholder who sued last week, accusing Musk of coercing investors to vote in favour of his compensation deal.

Ahead of the vote, Tesla board chair Robyn Denholm and other directors tried to rally shareholder support, saying that Musk earned his pay by hitting difficult financial targets and that the company ought to honour the terms of a 2018 agreement.

In addition to seeking to win over institutional investors, Tesla reached out to its sizeable number of individual shareholders. Individual investors are less likely to cast votes in a shareholder meeting, so Tesla took to social media to encourage them to vote and offered factory tours as an enticement.

About 45% of Tesla’s shareholders are institutional investors, a relatively low percentage compared with the largest companies that make up the top of the S&P 500.

Some prominent shareholders, including Nordea Asset Management and the California Public Employees’ Retirement System, publicly opposed the reapproval.

Two proxy-advisory firms, Institutional Shareholder Services and Glass Lewis, also argued against ratification, saying the compensation plan had failed to ensure that Musk paid more attention to Tesla than his other ventures.

Musk leads other businesses, including rocket maker SpaceX, social-media service X, and an artificial-intelligence start-up called xAI that recently raised $6bn.

Other Tesla stockholders supported the reapproval, such as ARK Investment Management and billionaire investor Ron Baron.

“How can shareholders renege on his pay package AFTER Elon and shareholders already have taken and overcome the risks associated with Tesla’s rise to producing the top selling car in the world?” ARK Chief Executive Cathie Wood wrote in a post on X last week.

The unorthodox pay package doesn’t include a salary and instead compensates Musk with 12 tranches of stock options, each one tied to the company hitting certain performance milestones.

When the package was approved in 2018, the targets appeared ambitious for a company then bleeding cash. In addition to clearing various profit and revenue thresholds, the plan required Musk to boost the company’s market value from a little under $60bn in 2018 to more than $650bn.

Since then, Musk has succeeded in transforming Tesla, once a scrappy, unprofitable start-up, into the envy of the auto industry with profit margins exceeding those of traditional car companies.

The company hit the last of the performance targets in 2022. While all 12 tranches — totalling 303 million shares — have fully vested, Musk hasn’t exercised any of the options.

Musk has a roughly 13% stake in Tesla, and the shares from the pay package could push it to more than 20%.

Musk has said he would like to control 25% of the company as it prepares to invest heavily in its next growth bet, artificial intelligence and self-driving cars.

Denholm argued a shareholder rejection would have resulted in a new, more costly stock-award deal for Musk. The company said issuing the same number of shares to Musk today could result in a $25bn charge on Tesla’s books, compared with $2.6bn in 2018, because the shares are valued based on the day they are granted.

Musk has criticised Delaware and its court system in the wake of the ruling and said companies should incorporate in other states.

“If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible,” Musk said in a February post on X announcing that SpaceX had relocated its incorporation to Texas.

 

[JohnDe]

2024 Annual Stockholder Meeting​

Thursday, June 13, 2024​

https://www.tesla.com/2024shareholdermeeting

 

[wayneL]

2024 Annual Stockholder Meeting​

Thursday, June 13, 2024​

https://www.tesla.com/2024shareholdermeeting

 

[sptrawler]

From the outside looking in, I think it shows a great deal of shareholder confidence, good on them.

 

[Value Collector]

From the outside looking in, I think it shows a great deal of shareholder confidence, good on them.

Nah, remember a lot of the voting interest was owned by people that benefit.

Secondly a large amount of Tesla shares are owned by people that don’t even really understand the numbers.

Thirdly, you should have seen the fear mongering rubbish they sent out to share holders, you wouldn’t think it was a vote about a managers pay packet, it was talking about survival of the company, and saying if you vote against the value of your investment could be lost, mean while the actual vote was a vote to clip 15% of the value off your stock and pass it to Elon.

 

[JohnDe]

From the outside looking in, I think it shows a great deal of shareholder confidence, good on them.

Cathie Wood explains it perfectly -

 

[sptrawler]

I guess you have to ask would you have had a Tesla without Musk? And you complain about a drop in your share value of 15%, you can always sell if you think you wont get the 15% back.
He would probably still be rich without you being a shareholder.
No one is forced to hold the shares, if they think it was a bad move.
I dont hold.

 

[Chipp]

12% SOI dilution incoming and Earnings revision downgrades will be the result of this . No-one in the cult is seeing this at all . Sliding EPS to slide some more .

Lets see where this settles in a week or so

 

[Value Collector]

I guess you have to ask would you have had a Tesla without Musk? And you complain about a drop in your share value of 15%, you can always sell if you think you wont get the 15% back.
He would probably still be rich without you being a shareholder.
No one is forced to hold the shares, if they think it was a bad move.

I have sold almost all of my Tesla stock now, only have 50 shares left as a little token holding.

There wouldn’t be a Tesla without Musk, but there also wouldn’t be a Tesla without all the share holders that put their money at high risk along side his.

Of course he deserves a huge wage for the Labour he put in, but $56 Billion is far too much, Tesla hasn’t even earned that much in its entire history, and 15% of share holders investment is a far to big clip to ask share holders to take to pay for the labour musk put in.

Remember 56,000 Million dollars is a lot of money, it would take Apple’s CEO 500 years to earn that, and Musk only works part time at Tesla, remember he dedicates a lot of his time to his other companies eg Space ex, Twitter and nuero link etc.

 

[sptrawler]

I have sold almost all of my Tesla stock now, only have 50 shares left as a little token holding.

There wouldn’t be a Tesla without Musk, but there also wouldn’t be a Tesla without all the share holders that put their money at high risk along side his.

Of course he deserves a huge wage for the Labour he put in, but $56 Billion is far too much, Tesla hasn’t even earned that much in its entire history, and 15% of share holders investment is a far to big clip to ask share holders to take to pay for the labour musk put in.

Remember 56,000 Million dollars is a lot of money, it would take Apple’s CEO 500 years to earn that, and Musk only works part time at Tesla, remember he dedicates a lot of his time to his other companies eg Space ex, Twitter and nuero link etc.

There are a huge amount of companies that go broke and their shareholders lose everything, but their executives between them take huge renumerations without adding anything to the companies.
Add up how many companies go broke while capital raising as they go around the S bend and the execs all get paid.
At least Musk is making something sellable. Lol
Is Tesla market value worth more than what they are giving Musk?
Is any other company more interwound more with its founder than Tesla, maybe Jobst would follow suit, if he were still around.
Same with Bill Gates, if he was up to his eyeballs in Microsoft, big profile, means big bucks.
Musk
Bezos
Zuckerburg

All similar net worth, why?

 

[Value Collector]

There are a huge amount of companies that go broke and their shareholders lose everything, but their executives between them take huge renumerations without adding anything to the companies.
Add up how many companies go broke while capital raising as they go around the S bend and the execs all get paid.
At least Musk is making something sellable. Lol
Is Tesla market value worth more than what they are giving Musk?
Is any other company more interwound more with its founder than Tesla, maybe Jobst would follow suit, if he were still around.
Same with Bill Gates, if he was up to his eyeballs in Microsoft, big profile, means big bucks.
Musk
Bezos
Zuckerburg

All similar net worth, why?

As you pointed out back then there was a very real risk Tesla could have gone broke, and its share holders took that risk and deserve to be paid for that risk, not have their returns clipped so much, that’s how risky ventures work, you need to earn a big pay day on the ones that work to fund the others that don’t.

Steve jobs paid himself $1 per year salary,

Bezos pays himself a few million a year,

They are billionaires because they worked to build strong companies who’s stock increased making them and their investors rich together by owning stock together.

Musk is basically double dipping, he has earned billions as his stock increased, and made his investors a lot of money to, but he isn’t happy with a couple of hundred Billion increase in his own shares, he wants to clip another 15% of all the rest of the shareholders.

Is Tesla market value worth more than what they are giving Musk?

Today yes, but share prices change, and he won’t refund the 15% of the company he took from his fellow shareholders if the share price drops next month, it’s a permanent transfer of 15% ownership, based on what might be a temporary increase in share price.

As I have said, I have no problem with paying him millions, but this pay packet is just to large, and Tesla couldn’t actually afford to pay him cash, so it’s being paid in equity, which just makes it worse.

 

[sptrawler]

Good point I wonder if the shareholders of Tesla today, will make more than shareholders of FMG today, in 10 years time, it will be an interesting comparison.
Or another way of looking at it, would Tesla shareholders of 10 years ago, be better off than FMG shareholders of 10 years ago today if the same amount of money was invested, both have done well.
I don't own either.

 

[Value Collector]

Good point I wonder if the shareholders of Tesla today, will make more than shareholders of FMG today, in 10 years time, it will be an interesting comparison.
Or another way of looking at it, would Tesla shareholders of 10 years ago, be better off than FMG shareholders of 10 years ago today if the same amount of money was invested, both have done well.
I don't own either.

I don’t know, they are both very different companies with different risks profiles. I don’t really judge whether each company I own outperforms or underperforms the others, but whether each one gives me a satisfactory result based on my expectations at the beginning, because I also own them for different purposes, eg I don’t expect CLW to outperform FMG, I own it to produce steady income, if it does that it’s a success.

The money I took out of TSLA, I have put into Berkshire, where there is far less risk because of the enormous diversification, growth will be steady like a ticking clock, and management are far more shareholder friendly.

(I am not saying Berkshire will be a star performer, just that I believe with its steady profits, steady share buybacks, and ability to take advantage of the next big down turn it should perform well)

 

[sptrawler]

Looks as though nearly three quarters of tesla shareholders voted for Musks pay packet, that is a high percentage.

Musk’s Tesla Pay Package Got Big Margin in Shareholder Vote

About 72 percent of shares in the balloting affirmed the chief executive’s lucrative stock award. The company hopes to get a court to reinstate it.

www.nytimes.com

Musk’s Tesla Pay Package Got Big Margin in Shareholder Vote​

About 72 percent of the shares in the balloting affirmed the lucrative stock award to the chief executive in a bid to get a court to reinstate it.

 

[Chipp]

I don’t know, they are both very different companies with different risks profiles. I don’t really judge whether each company I own outperforms or underperforms the others, but whether each one gives me a satisfactory result based on my expectations at the beginning, because I also own them for different purposes, eg I don’t expect CLW to outperform FMG, I own it to produce steady income, if it does that it’s a success.

The money I took out of TSLA, I have put into Berkshire, where there is far less risk because of the enormous diversification, growth will be steady like a ticking clock, and management are far more shareholder friendly.

(I am not saying Berkshire will be a star performer, just that I believe with its steady profits, steady share buybacks, and ability to take advantage of the next big down turn it should perform well)

Buying BRK in the next down turn ( not right now ) seems the logical play to me , maybe i am oversimplifying it . I get it that BRK has a lot of cash and that will help its performance against SPX during a selldown of note . Buffet is churning BRK cash through Treasury Bills which makes total sense given the 5.3% rate available atm . Maybe this is an option for cash if you are waiting/expecting a market capitulation ?

 

[JohnDe]

Looks as though nearly three quarters of tesla shareholders voted for Musks pay packet, that is a high percentage.

Musk’s Tesla Pay Package Got Big Margin in Shareholder Vote

About 72 percent of shares in the balloting affirmed the chief executive’s lucrative stock award. The company hopes to get a court to reinstate it.

www.nytimes.com

Musk’s Tesla Pay Package Got Big Margin in Shareholder Vote​

About 72 percent of the shares in the balloting affirmed the lucrative stock award to the chief executive in a bid to get a court to reinstate it.

Some of the left leaning commentators and shareholders having a cry about a pay deal that was approved by 73% of Tesla shareholders in 2018. And yesterday it was approved again by the majority of shareholders, because a deal is a deal.

The original deal was made when Tesla shares where worth pittance, and there was a great chance that the company could fold and go bankrupt. Elon was offered a ridiculous pay deal that could have seen him fail and earn nothing or succeed and be rewarded for it. Almost no financial guru thought that Elon would pull it off, that is create the mega company that Tesla is now.

It is not up to some socialist judge and disgruntled left leaning people to change the rules after the fact. It is up to the owners of the company, the shareholders.

Elon is one of the greatest thinkers of future development in the world, his involvement will see continual development and growth. Take him out and the companies that he is involved in will go the way of Apple, resting on the past laurels and creating no new groundbreaking technology. What has Apple delivered since Steve Jobs passed away? Nothing, everything they have was either delivered when he was in charge, or in the pipeline.

Elon has started severl goround breaking initiatives, all are progressing fast. People that have a complaint should take the time to do some research and see what has been going on for the past several years at Tesla. And stop belittling shareholders for the way they voted, the majority believe in the future path and want to give it the best chance possible, they know that it is high risk, but high risk is also high reward.

To all the whiners, I understand your disbelief at how high the payout will be but that is how a market economy works. If you don't like, go live in Russia, China, Vietnam, or any other socialist controlled country. The sad thing is that Australia is not far behind those countries at the moment and heading further left faster than ever.

• Originally approved by shareholders in 2018, the record-breaking compensation package comprising 303 million stock options at a discounted price
• Back in 2018, shareholders approved Musk’s pay deal, with 73 percent voting in favor. However, a Delaware court chancellor later invalidated the package in January 2024. The judge, Kathaleen McCormick, ruled that the process used by Tesla’s board to create the plan was unfair to shareholders.
• Tesla’s stock price skyrocketed nearly 1,700 percent between approval of the original pay package in 2018 and late 2021. But the stock price has since made a dramatic reversal, shedding more than half its value, including nearly 27 percent so far this year.
• Musk used the June 13 shareholder meeting as a symbolic gesture to prove investors still believe the package they approved six years ago is fair.

 

[sptrawler]

It is great to hear a honest appraisal, at the end of the day Musk has driven Tesla to be an extremely successful company. I doubt it would have survived without him, so giving him a payout reflective of that success is appropriate IMO.
There are plenty of other successful founders of companies that have a similar outcome to Musk, whether he or they build on that wealth is yet to be seen.

 

[noirua]

June 14, 2024.

 

[qldfrog]

Some of the left leaning commentators and shareholders having a cry about a pay deal that was approved by 73% of Tesla shareholders in 2018. And yesterday it was approved again by the majority of shareholders, because a deal is a deal.

The original deal was made when Tesla shares where worth pittance, and there was a great chance that the company could fold and go bankrupt. Elon was offered a ridiculous pay deal that could have seen him fail and earn nothing or succeed and be rewarded for it. Almost no financial guru thought that Elon would pull it off, that is create the mega company that Tesla is now.

It is not up to some socialist judge and disgruntled left leaning people to change the rules after the fact. It is up to the owners of the company, the shareholders.

Elon is one of the greatest thinkers of future development in the world, his involvement will see continual development and growth. Take him out and the companies that he is involved in will go the way of Apple, resting on the past laurels and creating no new groundbreaking technology. What has Apple delivered since Steve Jobs passed away? Nothing, everything they have was either delivered when he was in charge, or in the pipeline.

Elon has started severl goround breaking initiatives, all are progressing fast. People that have a complaint should take the time to do some research and see what has been going on for the past several years at Tesla. And stop belittling shareholders for the way they voted, the majority believe in the future path and want to give it the best chance possible, they know that it is high risk, but high risk is also high reward.

To all the whiners, I understand your disbelief at how high the payout will be but that is how a market economy works. If you don't like, go live in Russia, China, Vietnam, or any other socialist controlled country. The sad thing is that Australia is not far behind those countries at the moment and heading further left faster than ever.

• Originally approved by shareholders in 2018, the record-breaking compensation package comprising 303 million stock options at a discounted price
• Back in 2018, shareholders approved Musk’s pay deal, with 73 percent voting in favor. However, a Delaware court chancellor later invalidated the package in January 2024. The judge, Kathaleen McCormick, ruled that the process used by Tesla’s board to create the plan was unfair to shareholders.
• Tesla’s stock price skyrocketed nearly 1,700 percent between approval of the original pay package in 2018 and late 2021. But the stock price has since made a dramatic reversal, shedding more than half its value, including nearly 27 percent so far this year.
• Musk used the June 13 shareholder meeting as a symbolic gesture to prove investors still believe the package they approved six years ago is fair.

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globally agree but I think there is a required update to be done here @JohnDe ,
you are 20y ..or more behind ;-) when you quote:
"To all the whiners, I understand your disbelief at how high the payout will be but that is how a market economy works. If you don't like, go live in Russia, China, Vietnam, or any other socialist controlled country. The sad thing is that Australia is not far behind those countries at the moment and heading further left faster than ever."
I would say that both Russia and China are FAR MORE capitalist than Australia, or France/most of the EU/UK.
And there is nothing further from economic communism than these 2 countries
Not sure about Vietnam but would not be surprised to learn it is following economic free capitalism.
While it is true a Clive Palmer in either would be rich but under more government control in either Russia or China:
I am 100% sure that commoners like us have much more chance achieving serious multi digit millions USD wealth in both Russia or China with a free market economy than in socialist countries like Australia, the EU or California/NY states;
It is a sign that Tesla is moving to Texas, a state which so far has tried to push away the creeping socialism taking control of the US of A.

 

[Garpal Gumnut]

I fell out of love with Tesla last year when Elon stopped taking his tablets and tried to go up against AIPAC and the Israeli lobby in the USA and on X.com.

He appears to be attempting to fly again. Let us hope he doesn't get too close to the sun.

gg