![Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit to Gruenheide near Berlin on March 13, 2024.](https://npr.brightspotcdn.com/dims3/default/strip/false/crop/2667x2000+147+0/resize/1100/quality/15/format/jpeg/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2Fde%2F6a%2Fe6e489f1449f83e6873acb288754%2Fap24162696519774.jpg)
Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit to Gruenheide near Berlin on March 13, 2024.
Ebrahim Noroozi/AP
hide title
change the subtitles
Ebrahim Noroozi/AP
DETROIT β Tesla shareholders voted Thursday to restore CEO Elon Musk’s record $44.9 billion pay package that was thrown out by a Delaware judge earlier this year, sending a strong vote of confidence to his leadership of the electric vehicle manufacturer.
The favorable vote doesn’t necessarily mean Musk will receive all-stock compensation anytime soon. The package is likely to remain tied up in the Delaware Court of Chancery and Supreme Court for months as Tesla tries to overturn the Delaware judge’s refusal.
Musk has raised doubts about his future with Tesla this year, writing on X, the social media platform he owns, that he wanted a 25% stake in the company in order to stop it from taking AI development elsewhere. . Higher stakes are needed to control the use of AI, he said.
Tesla has also struggled with falling sales and profit margins as demand for electric vehicles slows worldwide.
![](https://npr.brightspotcdn.com/dims3/default/strip/false/crop/1080x1080+420+0/resize/100/quality/15/format/jpeg/?url=http%3A%2F%2Fnpr-brightspot.s3.amazonaws.com%2F1c%2Ff4%2F418042ff40779edc7d5ee3400fd9%2Fstarship-launch.jpg)
But at the company’s annual meeting Thursday in Austin, Texas, Musk assured shareholders he will stick around, telling them he may not sell any shares in the compensation package for five years.
“It’s not really money, and I can’t run and I don’t want to,” he said.
The vote total for Musk’s pay was not immediately announced, but the company said shareholders voted on Musk’s compensation plan, which was originally approved by the board and shareholders six years ago.
Tesla most recently valued the package at $44.9 billion in an April regulatory filing. It was once as high as $56 billion, but has fallen in value along with Tesla’s stock, which is down about 25% so far this year.
Chancellor Kathaleen St. Jude McCormick ruled in January in a shareholder lawsuit that Musk essentially controlled Tesla’s board when he ratified the package in 2018 and that he failed to fully inform shareholders who approved it that same year.
Tesla has said it will appeal, but asked shareholders to re-approve the package at Thursday’s annual meeting.
A separate vote approved moving the company’s legal home to Texas to avoid courts in Delaware, where Tesla is registered as a corporation.
“It’s unbelievable,” an elated Musk told the crowd at Tesla’s headquarters and massive factory in Austin, Texas.
Musk and Tesla didn’t win everything. Shareholders approved measures that cut board members’ terms from three to one and lowered the vote required for shareholder proposals to a simple majority.
Legal experts say Musk’s salary case will still be decided in Delaware, largely because Musk’s lawyers have assured McCormick they won’t try to move the case to Texas.
![](https://media.npr.org/assets/img/2024/04/23/ap24073474498757_sq-2b4693fdefb8419445f24243d701790298cb587b.jpg?s=100&c=15&f=jpeg)
But they differ on whether the new ratification of the pay package will make it easier for Tesla to approve it.
Charles Elson, a retired professor and founder of the University of Delaware’s corporate governance center, said he doesn’t think the vote will affect McCormick, who issued a ruling based on the law.
McCormick’s decision essentially made the 2018 compensation package a gift to Musk, Elson said, and that would require unanimous shareholder approval, an impossible threshold. The vote, he said, is interesting from the point of view of public perception, but “in my opinion it does not affect the decision.”
John Lawrence, a Dallas-based attorney with Baker Botts who defends corporations against shareholder lawsuits, agreed that the vote does not end the legal dispute and automatically gives Musk stock options. But he says it gives Tesla a strong case to overturn the decision.
He expects Musk and Tesla to argue that shareholders were fully informed before the recent votes, so McCormick should reverse its decision. But the plaintiff in the lawsuit will argue that the vote has no impact and is not legally binding, Lawrence said.
The vote, he said, was made under Delaware law and must be considered by the judge.
“This shareholder vote is a strong signal that you now have an absolutely well-informed body of shareholders,” he said. βThe judge in Delaware can still decide that this does not change anything about her previous decision and does not require her to make any other decision going forward. But I think it definitely gives Tesla and Musk strong ammunition to try to get him to reconsider this.β
If the ruling stands, then Musk will likely appeal to the Delaware Supreme Court, Lawrence said.
Many institutional investors have come out against Musk’s hefty payout, some citing the company’s recent struggles. But analysts said individual shareholder votes are likely to put Musk’s pay over the top.
Earlier Thursday, Tesla revealed that shareholders were voting on Musk’s pay package by a wide margin. That sent the company’s shares up 3% by the close of trading.
After the votes were announced, Musk began telling shareholders about new developments in the company’s “Full Self-Driving” system. It has jeopardized the company’s future in the development of autonomous vehicles, robots and artificial intelligence.
“Full Self-Driving” continues to improve with new versions, and its safety is miles better than human drivers, Musk said.
“This is actually going to work. This is going to happen. Mark my words, it’s just a matter of time,” he said.
Despite its name, Full Self-Driving can’t drive itself, and the company says human drivers must be ready to step in at all times. Tesla’s “Full Self-Driving” device went on sale in late 2015, and Musk has used the name ever since as the company collected data to teach its computers how to drive.
In 2019, Musk promised a fleet of autonomous robotaxis by 2020, and he said in early 2022 that the cars would be autonomous that year. In April last year, Musk said the system should be ready by 2023.
Since 2021, Tesla has been beta testing “Full Self-Driving” using volunteer owners. US safety regulators last year forced Tesla to withdraw the software after finding that the system misbehaved around intersections and could violate traffic laws.
Musk also said the company is making great progress on its Optimus humanoid robot. It currently has two working at its factory in Fremont, Calif., removing battery cells from a production line and placing them in shipping containers, he said.
Despite the layoff of the team working on Tesla’s Supercharger electric vehicle charging network, Musk said he thinks the company will deploy more chargers this year “that are actually working” than the rest of the industry. In the second half of the year, he expects to spend $500 million on Superchargers, Musk said.