The mobilization of Tesla and its boss Elon Musk has paid off: its enormous compensation plan was once again approved by the shareholders of the car manufacturer, after its cancellation by the courts in January.
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The announcement was made by Brandon Ehrhart, general secretary of Tesla, in front of several hundred shareholders gathered at a general meeting in Austin (Texas) and who greeted these two approvals with cheers and applause.
The plan had an estimated value of $56 billion when it was developed in 2018.
“Damn, I love you guys,” Elon Musk said as he took the stage, all smiles.
The billionaire had affirmed, shortly after the close of the remote vote at 11:59 p.m. Wednesday in Texas (4:59 a.m. GMT), that the two main resolutions had been validated “by a large majority!”, in a message published on Wednesday night see you Thursday on his social network
The second concerned the transfer of Tesla’s domicile from Delaware (east) to Texas (south).
The precise results have not yet been communicated.
“Uncork the Champagne, for Musk,” Wedbush analysts launched in a note on Thursday morning.
“We believe that the mass vote of small holders in favor of the two resolutions was crucial for their approval despite the opposition of some large institutional shareholders,” they reiterated after the approvals.
Well aware of the importance of individual shareholders, the electric vehicle specialist led an all-out campaign until the last moment to encourage them to vote, with its humanoid robot Optimus featured and tours of the Austin mega-factory to be won with, as guides, Elon Musk and Franz von Holzhausen, chief designer of Tesla.
Several large carriers had announced over the days that they were opposed to this package, as a certain number had already done on March 21, 2018, when this financial package was submitted to shareholders at an extraordinary general meeting.
The “yes” vote then won by 73%, excluding the votes of Elon Musk and his brother Kimbal. Their mandates as directors were renewed on Thursday for three years.
The package provided for distributions of shares for ten years, based on specific objectives.
Leaving the road
But a shareholder’s appeal to a Delaware court resulted in its annulment at the end of January.
In mid-April, the board of directors undertook a maneuver to get it back on track by including it on the menu for Thursday’s ordinary general meeting.
“The board supports this compensation plan. We believed in it in 2018, asking Elon to pursue remarkable objectives to develop the company,” the board argued at the time.
Tesla shares were worth $20.70 at the close of Wall Street the day before the 2018 AGM (taking into account the stock splits that have occurred since), and $177.29 at close on Wednesday.
According to Garrett Nelson, analyst at CFRA Research, individual shareholders hold approximately 40% of the manufacturer’s capital.
After a presentation of the group’s activities, the billionaire responded at length to questions from shareholders in the room. The AGM lasted almost 2 hours 30 minutes.
The fear, underlined by the analyst like other experts and shareholders favorable to the plan, was that, in the event of refusal by the AG, the billionaire could have turned away from Tesla to devote himself more to his other companies (SpaceX, X, xAI, Starlink, etc.).
“This is good news for investors,” commented Mr. Nelson after the AGM, believing that the approval lifted the sword of Damocles from the possible departure of Elon Musk.
Because, for many, Tesla is nothing without Elon Musk. At the end of 2023, he held 20.5% of the capital.
“Tesla is better with Elon. Tesla is Elon,” said Ron Baron last week, boss of Baron Funds which has invested around three billion dollars in Tesla shares. “Elon fulfilled his compensation contract. Elon earned his salary.
The California Teachers’ Pension Fund (CalSTRS), one of the three largest in the United States, and the Norwegian sovereign fund NBIM – the largest in the world and a 0.98% shareholder in Tesla at the end of 2023 – voted no .
No communication, however, from Vanguard, the leading investor with 7.23% at the end of 2023, or from BlackRock, the second investor with 5.9%. According to the Wall Street Journal, in 2018, the first voted against, the second voted for.
