Tesla shareholders have voted in favour of a proposal to given CEO Elon Musk a pay package worth more than US$56 billion (A$84.4 billion).
The preliminary outcome of the heavily publicised vote was shared today at Tesla’s annual Cyber Roundup shareholder meeting in Texas, with Mr Musk in attendance.
As well as voting to reinstate Mr Musk’s compensation package, shareholders voiced their approval for a proposal to reincorporate the US company in Texas from Delaware.
“Damn, I love you guys,” Mr Musk told the audience.
“We have the most awesome shareholder base of any company, it’s incredible.”
In addition to the proposals of the Tesla board that were supported by shareholders, investors also voted in favour of two shareholder proposals.
Shareholders voted to declassify the Tesla board, meaning that directors are re-elected on an annual basis. Tesla directors currently serve three-year terms.
The second successful proposal was a move to introduce a simple majority voting system for company decision making, with the intention of improving shareholder rights and reducing intervention.
A total of 12 proposals were voted on, five made by the board and seven by investors.
The headline votes of the stockholder meeting, however, were those around Mr Musk’s pay and where the company is incorporated.
Mr Musk had called for the Texas move after Chancellor Kathaleen McCormick of the Delaware Chancery Court intervened to block the pay deal in January this year, almost six years after the performance-based award had been approved by Tesla shareholders in 2018.
Tesla investor Richard Tornetta had also sued Mr Musk for breaching shareholder trust in awarding himself the “unfathomable sum”.
Delaware, where Tesla is currently incorporated, is considered a desirable location for companies to base their operations from a taxation perspective, and many large companies including Facebook are incorporated there.
The judge’s main reasons for revoking the compensation deal were Mr Musk’s effective control of the board and the compensation committee, the deal being neither fair nor necessary, and that shareholders approved it without knowing how the deal came about.
First tabled in 2018, the record-breaking compensation package was agreed upon back then with 73 per cent shareholder approval as a performance-based reward for Mr Musk.
It’s “the largest potential compensation opportunity ever observed in public markets,” according to the court filing.
Tallies from today’s vote have yet to be released.
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