- The carmaker also wants shareholders to approve moving its state of incorporation to Texas.
- A judge blocked Musk’s pay package saying he had too much control over the Tesla board.
- Tesla’s chairperson asserts Musk has not been paid for the past six years.
Tesla is calling on its shareholders to once again approve Elon Musk’s record-breaking compensation package that was blocked by a judge in January.
In 2018, Tesla and Must proposed a compensation package worth $55.8 billion if the automaker reached its ambitious targets. These targets were reached, however, Judge Kathaleen McCormick in Delaware, the state where Tesla is incorporated, said the pay package was improperly approved by Tesla’s board.
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In a letter addressed to Tesla shareholders, chairperson of the board Robyn Denholm said the board does not agree with the court’s decision and has pleaded with shareholders to vote in favor of reinstating Musk’s pay package.
“We do not agree with what the Delaware Court decided, and we do not think that what the Delaware Court said is how corporate law should or does work,” Denholm wrote. “So we are coming to you now so you can help fix this issue — which is a matter of fundamental fairness and respect to our CEO. You have the chance to reinstate your vote and make it count. We are asking you to make your voice heard — once again — by voting to approve ratification of Elon’s 2018 compensation plan.”
Denholm added that 73% of Tesla shareholders voted to approve Musk’s pay package in 2018 but said because of the court’s decision, “Elon has not been paid for any of his work for Tesla for the past six years.” This is “fundamentally unfair,” she added.
Tesla is also seeking support from its shareholders to move its state of incorporation from Delaware to Texas. It describes Texas as its “home” and says it has already received letters from thousands of Tesla stockholders supporting a move to make Texas its legal home.
Shortly after the judge blocked his pay package in January, Musk took to X to tell his followers to “never incorporate your company in the state of Delaware.”
