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Tesla shareholders on Thursday voted to reinstate CEO Elon Musk's $56 billion pay package that was voided by a Delaware judge and change the company's state of incorporation from Delaware to Texas.
The EV-maker held its annual shareholder meeting on Thursday in Austin, Texas, and announced that shareholders approved Musk's pay package, according to preliminary results announced by the company's general counsel at the meeting. Additionally, shareholders voted to reincorporate Tesla as a business domiciled in Texas instead of Delaware.
Musk suggested earlier in the day that shareholders were set to approve the proposals, posting a graph on X, formerly Twitter, that showed the number of votes in favor for both proposals surging above a "guaranteed win" threshold in recent days. He wrote in a post on X, formerly Twitter, "Both Tesla shareholder resolutions are currently passing by wide margins! Thanks for your support!!"
Tesla shareholders first approved the $56 billion pay package in 2018. The compensation plan features no salary or bonus and offers rewards in the form of stock options that are awarded based on Tesla's market value rising to as much as $650 billion over the 10 years following 2018.
Tesla CEO Elon Musk's $56 billion pay package was reinstated by the company's shareholders. (Photo by ETIENNE LAURENT/AFP via Getty Images / Getty Images)
MUSK SAYS SHAREHOLDERS ARE BACKING HIS $56 BILLION PAY PACKAGE
In late January, a Delaware judge voided the pay plan in response to an investor lawsuit. The judge held that Tesla's board of directors failed to adequately disclose potential conflicts of interest given some directors close personal relationships with Musk, and also failed to inform shareholders that Tesla was on pace to achieve many of the pay plan's performance-based goals.
The Delaware judge's ruling still stands despite the shareholder vote, though the show of support for the compensation plan may factor into a potential appeal and any future litigation on the subject.
This is a developing story. Please check back for updates.
Gxstocks' Chris Pandolfo contributed to this report.
