Tesla shareholders approve Elon Musk’s $1tn pay deal

{"text":[[{"start":9.43,"text":"Tesla investors have overwhelmingly backed Elon Musk’s $1tn pay deal, hoping that the prospect of the largest payday in corporate history will persuade the billionaire to focus his attention on the electric vehicle maker."}],[{"start":24.82,"text":"The package, which could add as much as 12 per cent to Musk’s ownership stake through equity awards, was approved by a majority of 75 per cent of votes cast at Tesla’s annual meeting at its Texas gigafactory on Thursday."}],[{"start":41.120000000000005,"text":"Shareholders’ anxiety about Musk’s threat to quit as chief executive if the proposal was rejected outweighed governance and societal concerns around the huge pay deal for the world’s richest man."}],[{"start":54.60000000000001,"text":"When the results were announced, Musk emerged on stage to cheers from the audience of retail shareholders, dancing to techno music alongside a pair of “Optimus” humanoid robots."}],[{"start":66.15,"text":"“With AI and robotics, you can actually increase the global economy by a factor of 10 or 100. There’s, there’s not like an obvious limit,” Musk told the audience. “I guess what I’m saying is, hang on to your Tesla stock.”"}],[{"start":83.65,"text":"Investors also re-elected three Tesla directors — Musk ally Ira Ehrenpreis, Airbnb co-founder Joe Gebbia, and former Walgreens Boots Alliance human resources head Kathleen Wilson-Thompson — despite opposition from corporate governance advisers."}],[{"start":100.45,"text":"The deal sets up ambitious targets for Musk to unlock his stock payouts in a series of instalments over the next decade. To reach $1tn, he must sextuple Tesla’s valuation to $8.5tn, boost earnings 24-fold to $400bn and sell millions of robots and autonomous driving subscriptions."}],[{"start":124.53,"text":"Musk and Tesla’s board argued the package, which includes no salary or bonus, was essential to secure his control over the company as it builds powerful artificial intelligence models and an “army” of millions of humanoid robots."}],[{"start":141.56,"text":"Proxy advisers Institutional Shareholder Services and Glass Lewis counselled investors to vote against the proposal. They criticised its “striking magnitude” and lack of “prescriptive elements” to ensure Musk prioritises Tesla over his other ventures."}],[{"start":159.56,"text":"Both advisers also said investors should oppose Ehrenpreis due to his closeness to Musk and for presiding over the board’s governance committee when unilateral changes were made to company bylaws to limit shareholders’ ability to sue for breach of fiduciary duties."}],[{"start":178.16,"text":"Some smaller investors including Ron Baron and Cathy Wood of Ark Invest had said in advance they would vote in favour. Musk and his brother Kimbal, who is on the board, were allowed to vote under Texas laws. They have had to recuse themselves in prior matters about his pay."}],[{"start":null,"text":"

"}],[{"start":197.7,"text":"Tesla suffered a setback earlier this week when Norway’s oil fund, the seventh-largest shareholder with a 1.1 per cent stake, said it would vote against the package. The $2.1tn oil fund said it was “concerned about the total size of the award, dilution and lack of mitigation of key person risk”."}],[{"start":218.73,"text":"Chair Robyn Denholm, chief financial officer Vaibhav Taneja and general counsel Brandon Ehrhart spent last week in New York lobbying top investors for their support, warning of a bleak future for the $1.4tn carmaker should it lose Musk."}],[{"start":237.92999999999998,"text":"Denholm said in recent interviews with the Financial Times that the share price could collapse without Musk at the helm and that a package of this size is the only way to motivate the world’s richest man to put in superhuman effort and achieve “impossible things”."}],[{"start":null,"text":""}],[{"start":255.92999999999998,"text":"Musk’s wealth and pay have been the subject of years of controversy and lawsuits. He has amassed a $460bn fortune across his empire including SpaceX and xAI."}],[{"start":269.83,"text":"A Delaware court struck down his prior pay deal last year. Even though Tesla surpassed targets that seemed impossible when they were set in 2018, the court determined that the $56bn package was excessive and the board was too close to Musk."}],[{"start":290.13,"text":"Tesla won a vote to reapprove the 2018 pay deal at its annual meeting last year, but the judge upheld her decision and it is now being appealed at the state’s supreme court."}],[{"start":302.46,"text":"A nonbinding advisory shareholder resolution for Tesla to invest in Musk’s AI and social media group xAI gained more votes in favour than against. But a high number of abstentions meant the company would have to examine the results before deciding what to do, Tesla’s general counsel said."}],[{"start":322.99,"text":"Tesla stock was flat in after-hours trading. It has a market value of $1.4tn, more than all other western carmakers combined."}],[{"start":343.11,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1762475239_8800.mp3"}