Billionaire Elon Musk, boss of Tesla, affirmed that the car manufacturer’s shareholders had validated his mega-remuneration “by a large majority”, in a message published during the night from Wednesday to Thursday on his social network X.
“Tesla’s two shareholder resolutions are currently adopted by a large majority! “, wrote Mr. Musk, after the polls closed at 11:59 p.m. Wednesday in Texas (04:49 GMT).
His messages regarding Tesla must be pre-approved by a lawyer before being published on social networks since 2022.
Results have not been officially announced at this time, with the general meeting scheduled to begin at 3:30 p.m. Austin, Texas time. Asked by AFP, Tesla did not immediately respond.
The two resolutions he refers to concern his compensation plan, worth an estimated $56 billion when it was drawn up in 2018, and the transfer of Tesla’s domicile from Delaware (east) to Texas (south).
Around 1:50 p.m. GMT, Tesla shares jumped 7.01% on the New York Stock Exchange.
“Uncork the Champagne, for Musk,” Wedbush analysts said in a note.
“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 continued.
Well aware of the importance of individual shareholders, the group led an all-out campaign until the last moment to encourage them to vote.
“Your vote is crucial for the future growth and success of Tesla and for the value of your investment,” insisted the electric vehicle specialist in a video explaining, with the help of his humanoid robot Optimus, how to vote.
In addition to an ad hoc website with countdown and advocacy as well as advertising inserts, it also offered, by lottery, fifteen visits to the Austin mega-factory with Elon Musk and Franz von Holzhausen as guides, 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.
The package provided for share distributions 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 goals to grow the company,” the board argued at the time.
Tesla shares were worth $20.70 at Wall Street’s close the day before the 2018 AGM, and $177.29 at close on Wednesday.
“We think investors will need to buckle up ahead of what should be a volatile week for their stocks,” warned Garrett Nelson, analyst at CFRA Research.
According to him, individual shareholders hold around 40% of the manufacturer’s capital.
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 would turn away from Tesla to devote himself more to his other companies. (SpaceX, X, xAI, Starlink, etc.).
However, for many, Tesla is nothing without Elon Musk.
“Tesla is better with Elon. Tesla is Elon,” said Ron Baron, boss of Baron Funds which has invested around three billion dollars in Tesla shares. “Elon fulfilled his compensation contract. Elon earned his salary.”
Asked by AFP, Vanguard, the leading investor with a share of 7.23% at the end of 2023, refused to reveal its vote and BlackRock, the second investor with 5.9%, did not respond.
According to the Wall Street Journal, in 2018 the first voted against, while the second approved the plan.
The California Teachers’ Pension Fund (CalSTRS), one of the three largest in the United States, voted no for this plan described as “ridiculous” by Chris Ailman, its investment director.
Same refusal from the Norwegian sovereign fund NBIM – the largest in the world and a shareholder of Tesla with 0.98% at the end of 2023 – as in 2018.