Tesla: Musk claims pay deal victory
“Hot damn, I love you guys!” said a jubilant Elon Musk as he appeared on stage just after Tesla shareholders voted to reinstate his astronomical pay package. The share options award – which has fallen in value from $56bn to $44-46bn, in line with the electric carmaker’s declining shares – isn’t yet in the bag, said Al Jazeera: it doesn’t reverse the January ruling of a Delaware judge that the package is excessive. But it “could bolster Tesla’s appeal”. In a second win for the tycoon, shareholders also approved proposals to move the firm’s incorporation from Delaware to the more easy-going regime of Texas.
The vote followed months of lobbying which saw Musk, who had threatened to quit the car company if thwarted, ranged against the influential proxy adviser Glass Lewis, and institutional investors including Norway’s gigantic sovereign wealth fund.
But Wall Street clearly “thinks Tesla’s value is tied to keeping Musk happy”, said DealBook in The New York Times. Big-hitting supporters included Vanguard and BlackRock. More fool them, said Danny Fortson in The Sunday Times. When Musk was in empire-building mode in 2018, he was “worth every penny” of the biggest share incentive package in history. That’s a moot point now that he splits his attention between six different companies and is “surrounded by sycophants” endorsing his increasingly suspect choices.
The “big loser” in this affair could be Delaware itself, said The Wall Street Journal. Some two-thirds of America’s S&P 500 firms are incorporated in this tiny state, with its “specialised” courts. By voting to quit, Tesla shareholders “could be ratifying the view” that “Delaware’s shareholder protections have gone too far”. Musk fancies himself as a pied piper. It will be intriguing to see who follows him.