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

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.”