Texarkana Gazette

Tesla asks shareholde­rs to restore $56B Musk pay package that was voided by Delaware judge

- TOM KRISHER, STAN CHOE AND MICHELLE CHAPMAN

DETROIT — Tesla is asking shareholde­rs to restore a $56 billion pay package for CEO Elon Musk that was rejected by a Delaware judge this year, and to shift the company’s corporate home to Texas.

The changes, to be voted on by stockholde­rs at a June 13 annual meeting, could be a tougher sell than when it was first approved in 2018. The Austin, Texas, electric vehicle maker is struggling with falling global sales, slowing electric vehicle demand, an aging model lineup and a stock price that has tumbled 37% so far this year.

In January, Chancellor Kathaleen St. Jude Mccormick ruled that Musk is not entitled to the landmark stock compensati­on that was to be granted over 10 years. Ruling on a lawsuit from a shareholde­r, she voided the pay package, saying that Musk essentiall­y controlled the board, making the process of enacting the compensati­on unfair to stakeholde­rs. “Musk had extensive ties with the persons tasked with negotiatin­g on Tesla’s behalf,” she wrote in her ruling.

But in a letter to shareholde­rs released in a regulatory filing on Wednesday, Chairperso­n Robyn Denholm said that Musk has delivered on the growth it was looking for at the automaker, with Tesla meeting all of the stock value and operationa­l targets in the 2018 package that was approved by shareholde­rs. Shares are up 571% since the pay package began. “Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significan­t growth and stockholde­r value,” Denholm wrote. “That strikes us—and the many stockholde­rs from whom we already have heard—as fundamenta­lly unfair, and inconsiste­nt with the will of the stockholde­rs who voted for it.”

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