If Tesla shareholders vote against restoring Elon Musk’s $44.9 billion pay package Thursday, the CEO could deliver on threats to take artificial intelligence research to one of his other companies
If Tesla shareholders vote against restoring Elon Musk’s $44.9 billion pay package Thursday, the CEO could deliver on threats to take artificial intelligence research to one of his other companies. Or he could even could walk away.
If they approve the all-stock compensation package that was thrown out by a Delaware judge in January, it would almost guarantee he would remain at the company he grew to be the world leader in electric vehicles, shifting to AI and robotics including autonomous vehicles, which Musk says is Tesla’s future.
But even with reapproval at Thursday’s annual shareholders’ meeting, which many analysts say is likely, there would be uncertainty. Musk has threatened on X, his social media platform, to develop AI elsewhere if he doesn’t get a 25% stake in Tesla (He owns about 13% now). Musk’s xAI recently received $6 billion in funding to develop artificial intelligence.
Wedbush Analyst Dan Ives said he expects the package to be overwhelmingly reapproved, ending a lot of uncertainty with Musk. “This issue has been an overhang on Tesla’s stock, and this will be important to move this distraction in the rearview mirror,” Ives wrote in a note to investors.
Shares of Tesla Inc. have slumped more than 30% this year with the company warning of “notably lower” sales growth in 2024.
Also on the shareholder ballot is the related issue of moving the electric vehicle maker’s legal home out of Delaware to Texas.
The move is designed to escape from the Delaware court’s oversight and possibly a ruling from Chancellor Kathaleen St. Jude McCormick that invalidated Musk’s pay package. In a January opinion on a shareholder lawsuit, the judge determined that Musk controlled the Tesla board and is not entitled to the landmark package once worth nearly $56 billion.
