Tesla investor support for Musk pay plan declined from 2018 package

Tesla shareholders last week voted to give CEO Elon Musk a record pay package that could earn the company’s shares nearly $1 trillion over the next decade. However, Musk received less support than under his previous pay plan in 2018.

Leaving aside the shares owned by board members and managers, approximately 66% of the shares in the voting were in favor of the package. filing on Friday. That rate was 73% when shareholders voted for the 2018 plan, according to analysis by Andrew Droste, head of corporate governance at investment firm Columbia Threadneedle.

Tesla, which announced preliminary results at the company’s annual shareholder meeting on Thursday, said the plan had 75% support among voting shares. The company count included insiders like Musk, who owns a roughly 15% stake in Tesla and was allowed to vote his shares as a proxy.

The drop from the previous vote comes after a tumultuous period for Musk and Tesla. Sales fell in the first half of the year, due in part to Musk’s inflammatory political rhetoric and his work for the Trump administration, which is shrinking the size of the federal government. Tesla’s brand value has also deteriorated.

Still, Droste said in an email, even at 66% of the vote, there is “broad support for Elon among Tesla’s shareholder base.” Most investors recognize that Tesla and Elon Musk are “inextricably linked” and “do not want to risk potential separation by allowing this vote to fail,” he wrote.

Board members recommended that shareholders approve the payment plan they introduced in September. Senior proxy advisors Glass Lewis and ISS had recommended investors vote against it.

Currently the richest person in the world, Musk’s salary package consists of 12 share slices that will be given if Tesla reaches a certain target. milestones in the next ten years. The first tranche of stock will be paid out if Tesla reaches a market cap of $2 trillion, which is about $500 billion more than the current valuation. Rewards tied to market value gains are matched with operational achievements.

Musk could still raise more than $50 billion by meeting the more achievable goals set for him by the board in the new compensation plan. There is also a list of “covered events” in the award terms that would allow him to earn his shares without meeting required operational milestones.

Tesla did not immediately respond to a request for comment.

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