In a recent Bloomberg report, it was revealed that Tesla CEO Elon Musk has stated that two important proposals regarding his pay package and Tesla’s legal home relocation to Texas are currently receiving strong support from shareholders. These preliminary results are fantastic news for Musk and Tesla, as the company has been working hard to rally support among both institutional and retail investors.
The annual shareholder meeting is scheduled for June 13 at Tesla’s headquarters in Austin, where investors will be voting on Proposal 3 to make Texas the company’s legal home and Proposal 4 to re-ratify Musk’s $56 billion compensation package. This compensation package, initially approved in 2018, was invalidated by a Delaware judge earlier this year due to insufficient shareholder disclosure.
However, with enhanced disclosures leading up to the current vote, analyst Alexander Potter of Piper Sandler believes that the re-ratified compensation package is unlikely to face legal challenges. In fact, key supporters of Musk’s package include prominent investment firms Baillie Gifford & Co. and Ark Investment Management LLC, as well as longtime Tesla investor Ron Baron.
On the other hand, opponents of the package include Norges Bank and California Public Employees’ Retirement System. Despite the differing opinions, the outcome of this vote could have a significant impact on Musk’s future at Tesla, as Baron noted in a public letter supporting the CEO.
To engage with shareholders, Tesla Chair Robyn Denholm has been in discussions with institutional investors, and the company has utilized advertisements on platforms such as X, which is owned by Musk. As the shareholder meeting approaches, Tesla engineers and executives have also shown their support for Musk’s leadership on social media.
The shareholder meeting will be livestreamed on Thursday, starting at 4:30 p.m. Eastern Time. Stay tuned for further updates on this developing story.
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