Tesla shareholders once again grant Musk a huge stock package.
Tesla shareholders have once again approved a massive stock package worth several tens of billions of dollars for CEO Elon Musk. The compensation plan, originally approved in 2018, had been overturned by a US court in January. The decision shows that Musk continues to enjoy the trust of a large portion of Tesla shareholders - despite criticism of his sometimes unpredictable behavior, controversial political statements, and focus on other ventures like the online platform X. However, the new vote does not mean that Musk automatically receives the stock package now. But it improves his chances in the legal dispute.
In the first vote in 2018, the stock package was approved by a majority of 73 percent. However, a shareholder sued against it - and ultimately a judge in Delaware torpedoed the plan. She concluded that Musk had close relationships with members of the Tesla board of directors, with whom he had negotiated the generous compensation. Shareholders had been left in the dark about these entanglements before the first vote. Thus, they had no opportunity to make a well-considered decision, the judge reasoned in her ruling.
Even through the process itself, shareholders were now well-informed - and still confirmed the package. Tesla can present this argument in court soon. Shareholders also voted to move Tesla's registered office from the US state of Delaware to Texas, as the company announced at the annual general meeting on Thursday. Musk had initiated the move following the judge's ruling. He had already relocated the headquarters a few years ago from Palo Alto in Silicon Valley to Austin, Texas.
Over 300 Million Shares for Musk
The compensation plan granted Musk the right to gradually acquire about 300 million Tesla shares at the 2018 price if the company meets ambitious goals within a period of up to ten years. This included increasing the market capitalization from roughly 50 billion dollars at the time to 650 billion dollars. Based on this target, the potential value of the package was estimated at around 56 billion dollars. After rapid growth and the then euphoria over electric cars, Tesla quickly reached this mark and was at times even worth more than a trillion dollars - making Musk's compensation package around 100 billion dollars. Meanwhile, the gains have slowed, and Tesla now has a market value of about 580 billion dollars.
Next Shareholder Lawsuit at the Annual General Meeting
Musk disclosed a few months ago that he did not feel comfortable developing applications with artificial intelligence and robotics at Tesla without enough control over the company with a voting share of about 25 percent. Some shareholders took this as a threat. And thus, another shareholder lawsuit followed at the annual general meeting in Delaware - alleging that Musk weakens Tesla because he diverts AI resources to his other companies. Currently, Musk holds about 13 percent of the voting rights; with the 2018 package, he would reach about one-fifth - and he has already hinted that he expects further stock options in the future.
$30 Trillion Market Value?
After the vote, Musk was celebrated on stage at the annual meeting in Tesla's Austin factory – and also fielded questions from shareholders. Most of them emphasized that they were big fans of the 52-year-old tech billionaire. Musk whetted shareholders' appetites with promises of even greater stock price jumps. He believed that Tesla would be worth ten times more in five years than it is today. Better yet: "I think it's possible for Tesla to be worth ten times more than the most valuable company today." After a brief pause, an outcry of enthusiasm followed in the room. That would be a market value of around $30 trillion – Microsoft and Apple are currently neck and neck at $3.28 trillion.
A Future with More Robots than Humans
Musk did not specify a timeline for this astounding increase in value. However, besides cars – eventually, more than 100 million Teslas would be on the road – he saw the robot business as the key. In the future, there would be more robots on Earth than humans, Musk predicted. "Somewhere in the range of 10 billion, maybe 20 or 30." Tesla would produce a large portion of them.
Already next year, more than 1,000 of the in-house humanoid robots named Optimus could be working in Tesla factories, Musk said. Currently, two Optimus robots are packing battery cells in Tesla's factory in Fremont, California. Alongside his future visions, Musk also confided to Tesla shareholders that "in the past approximately seven months," two individuals had shown up who wanted to kill him "and some other people." That's why he had stopped giving autographs.
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