Musk’s pay battle is not over. Here’s why. – MASHAHER

Shareholders at Tesla (TSLA) have approved a $56 billion compensation plan for CEO Elon Musk. In addition to approving the pay package, shareholders voted in favor of Tesla’s redomestication from Delaware to Texas, a move that Musk had previously pursued after facing initial resistance from a Delaware judge regarding his pay. However, the battle over Musk’s pay is far from over.

Yahoo Finance reporter Alexis Keenan dives into the details, providing insights into the forthcoming legal steps that will unfold after this pivotal shareholder vote.

For more expert insight and the latest market action, click here to watch this full episode.

This post was written by Angel Smith

Video Transcript

Tesla’s shareholder meeting is still underway.

But listen, the headline is out, Elon Musk has won the Tesla shareholder battle to keep his record breaking pay and joining us.

Now with the takeaways thus far, we got Yahoo Finance’s Alexis Keenan and Pra Sumo and welcome guys, Alexis.

I’ll start with you.

So, all right, the headline is out now, what, what happens next election?

He kind of won the battle but not the war, right?

Because, and what do you mean by that?

Well, so legal experts say that this is not the end, there’s more litigation to come no matter what the result of this vote.

Uh Elon Musk had and Tesla had an appeal on the table that presumably moot.

Now, that doesn’t seem like it has any legs.

But look, you could argue this either way and say that this result, this vote itself could harm shareholders.

So we could see some action from shareholders not liking whatever effect this has on the stock.

Uh But also, uh you know, you have to look at the big question here and what’s going to be litigated in the future is, did the board meet its fiduciary duties in putting this up for a reboot?

Did they have an arm’s length negotiation with Elon Musk?

Did they disclose all of the necessary conflicts between Musk and the board member who recommended it?

And also did they benchmark this pay package against other ceos?

And yes, there’s the argument out there that there is no other analog for Elon Musk that he’s won of a kind that you can’t really compare what he should be compensated with to other us CEO s of public companies.

Um But that is one of the things that the courts would be looking at.

Uh mostly this proposal was unchanged from the last version in 2018.

But for the fact that you had a board member, a one member special committee for recommending this proposal on the pay side, uh who did not propose back in 2018 because she was not yet on the board during that vote.