Niles Investment Management Founder and Portfolio Dan Niles talks about Tesla’s $1 trillion compensation plan for Elon Musk on “The Claman Countdown.”
Tesla CEO’s fate Elon Musk’s The proposed $1 trillion compensation plan will be debated on Thursday as shareholders vote on whether to approve the historic compensation plan.
Under the pay plan proposed in September, Musk would receive up to about 12% of his compensation. tesla stocksubject to restrictions if Tesla reaches a market capitalization of $8.5 trillion or other business milestones in 10 years, would be worth about $1 trillion. Tesla’s current market valuation is about $1.45 trillion, and Musk currently owns about 13% of the company’s outstanding shares.
The revised compensation plan was proposed amid legal uncertainty surrounding the $56 billion compensation package he was awarded in 2018, which was invalidated by a Delaware judge in January 2024 and is currently being litigated.
Robin Denholm, chairman of Tesla’s board of directors, warned shareholders that if Musk’s pay package is not approved, the company could spend time on Musk’s other entrepreneurial endeavors.
Tesla could lose Musk if $1 trillion paid package is not approved, board chairman warns
Tesla CEO Elon Musk’s proposed $1 trillion pay package is based on the company meeting performance goals. (Reuters/Jonathan Ernst//File Photo/Reuters Photo)
Denholm sent a letter to shareholders asking if they would like to keep Elon as Tesla’s CEO and encourage him to make Tesla a leading provider. autonomous solution And what is the world’s most valuable company? ”
Denholm added, “If we are unable to foster an environment that motivates Mr. Elon to achieve great results through a fair pay-for-performance plan, we risk Mr. Elon relinquishing his leadership position and Tesla could lose his time, talent, and vision that were essential to delivering exceptional shareholder returns.”
Musk pleads with Tesla investors to approve huge $1 trillion paid package deal
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| TSLA | Tesla Inc. | 462.26 | +18.00 |
+4.05% |
Musk took a moment during Tesla’s latest earnings call to urge shareholders to approve the package he so badly wants. voting management “To give you a lot of influence, but not so much that you won’t get fired if you go crazy.”
Not all Tesla shareholders support the pay structure, and one investor with a large stake in the company spoke out against the plan before the vote.
Musk teases Tesla flying car: ‘Crazy technology’
Tesla CEO Elon Musk said he wants shareholders to approve the pay plan to ensure sufficient voting rights. (Richard Bode/WireImages/Getty Images)
Norwegian sovereign wealth fundTesla’s sixth-largest outside investor, said he would vote against the compensation plan.
“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total compensation, dilution, and lack of risk mitigation for key personnel, which is consistent with our views on executive compensation,” Norges Bank Investment Management said in a post on its website.
Proxy advisory firms Glass Lewis and ISS are also urging shareholders to reject the compensation package.
CLICK HERE TO GET FOX BUSINESS ON THE GO
Last year, Tesla shareholders were asked to vote on reinstating the company’s $56 billion compensation package from 2018, and about 77% of them voted in favor, fulfilling the obligation. At the time of the shareholder vote, the company’s total payroll was worth about $44 billion, as Tesla’s stock price fell.
FOX Business’ Daniella Genovese and Reuters contributed to this report.
