Tesla CEO Elon Musk won the backing of shareholders Thursday in his fight to reclaim a $56 billion pay package voided by a Delaware judge who ruled the record-breaking compensation was excessive.
Shareholders voted in favor of restoring the package they approved in 2018, Brandon Ehrhart, Tesla’s general counsel and board secretary, announced onstage at the company’s annual shareholder meeting. He did not announce the vote totals.
The crowd at the meeting in Austin, Texas, cheered after the announcement, according to the livestream of the event.
Ehrhart also said shareholders voted to move Tesla’s corporate home to Texas from Delaware, fleeing the state where most big companies are incorporated, after Musk said Delaware’s court system was “broken.”
The win for Musk came on the shoulders of Tesla’s individual investors, who Musk said backed him by a wide margin, in contrast to some institutional investors who criticized his pay. He used his account on X, where he has 187 million followers, to rally support among retail investors and criticize those who opposed him, such as a Norwegian sovereign wealth fund.
But the fight over the $56 billion isn’t over. The Delaware judge who struck down Musk’s compensation in January is likely to be asked to rule on whether the latest shareholder vote was fair under the state’s business laws. And last week, a different Tesla shareholder from the one involved in the earlier case filed a new lawsuit, arguing that the second vote should be ruled invalid.
Musk has become a much more polarizing public figure than he was several years ago, including by embracing extreme views on immigration and transgender rights. He has also grown closer to former President Donald Trump.
The shareholder vote, though, solidifies his position atop Tesla. Musk all but threatened to leave Tesla if shareholders didn’t grant him more shares.
Musk walked onstage to cheers a few minutes after the announcement and addressed the gathered shareholders who had just endorsed his pay package.
“Hot damn, I love you guys,” he said. “We have the most awesome shareholder base.”
The compensation plan, which consists of stock options tied to Tesla’s hitting various performance benchmarks, would be the largest in corporate history if Musk is able to collect it all, according to the ruling by Delaware Chancery Court Judge Kathaleen McCormick. She found that it was 250 times larger than the median pay among Musk’s peers.
Musk has argued that he has worked without pay for years because he had yet to exercise any of the stock options and that he would have to hold the shares for five years before he could sell them. But he also owned 13% of Tesla’s shares as of January, so he has benefited from the rising share price in recent years.
Musk has a net worth of about $200 billion, making him the world’s third-wealthiest person, according to the Bloomberg Billionaires Index this week.
