Tesla shareholders voted to reinstate CEO Elon Musk's $56 billion pay package that was voided by a Delaware judge and change the company's state of incorporation from Delaware to Texas. The EV-maker held its annual shareholder meeting in Austin, Texas, where shareholders approved Musk's pay package and voted to reincorporate Tesla as a business domiciled in Texas.
Musk had indicated earlier in the day that shareholders were likely to approve the proposals, with a surge in votes in favor for both proposals. The $56 billion pay package, initially approved in 2018, features no salary or bonus but offers rewards in the form of stock options based on Tesla's market value reaching up to $650 billion over a 10-year period.
Despite the shareholder vote, a Delaware judge's ruling voiding the pay plan still stands. Proxy advisory firms and some investors opposed the approval of the pay package, citing concerns over corporate governance and shareholder communication.
Tesla's board of directors recommended that shareholders support the proposal, with public supporters including Florida's pension board and investor Ron Baron. The company's stock rose during Thursday's trading session, showing a positive response to the shareholder decisions.
Texas Governor Greg Abbott congratulated Musk on the pay package reinstatement and Tesla's new incorporation in Texas, highlighting the state's tax advantages. The stock market response to the news was positive, with Tesla's stock rising during and after trading hours.
