Robyn Denholm, the chair of Tesla Inc. TSLA's board of directors, pleaded with shareholders on Friday to reapprove CEO Elon Musk's $47 billion pay package, which a Delaware judge had previously overturned.
What Happened: Denholm made a video appeal to shareholders, stressing the vote's significance for Tesla's future. She contended that the ruling of a single judge should not supersede the collective will of Tesla's millions of owners.
Musk's pay package, valued initially at around $56 billion, has shrunk to $47 billion due to a decline in Tesla's share price. The package was scrapped following a shareholder lawsuit alleging the payout was excessive.
Denholm defended Musk's compensation in the video, asserting it was justly given as an incentive for Musk to reach "ambitious financial and operational targets." Under Musk's stewardship, Tesla's revenues have soared from $11.8 billion to $96.8 billion, turning a $2.2 billion loss into a $15 billion profit.
In the video, Denholm said it would also be "incredibly important for the future of the company."
Denholm additionally underscored that Musk's success has benefited all shareholders, as their shares' value has surged by 1,100%. Tesla's value has increased from $53.7 billion to over $790 billion.
A shareholder vote on Musk's compensation package is scheduled at the annual 2024 shareholder meeting on June 13.
Why It Matters: This development comes in the wake of a series of disclosures by Tesla, revealing a complex network of transactions totaling $9.1 million among Musk's various enterprises, including SpaceX, X and The Boring Company. This has raised serious questions about corporate governance.
Furthermore, Musk's net worth recently climbed to $185 billion, making him the world's third-richest billionaire, per the Bloomberg Billionaires Index. This was largely due to a resurgence in Tesla's stock value.
These events provide a backdrop to the ongoing debate over Musk's pay package, highlighting the financial dynamics at play within Musk's business empire and his wealth.
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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