Tesla shareholders decided to restore CEO Elon Musk’s $55.8 billion (€52 billion) compensation package, which a Delaware court had declared void in January. Despite a 2.9% gain on Thursday, the value of the package plan has now decreased to $48.4 billion (€45 billion) as a result of a 26% reduction in Tesla’s shares this year. Additionally, Tesla’s investors have approved the company’s incorporation from Delaware to Texas. Elon Musk said that both resolutions were “passing by side margins” on his privately held social media network X, which was once known as Twitter.
If Musk exercised the options, his massive 2018 pay plan holdings would increase to around 21% of the firm, demonstrating confidence in Elon’s ability to manage Tesla. The outcome of the vote, however, does not ensure that Musk will get the money; rather, it only provides popular backing for him to reverse the court’s decision.
Six businesses are under Elon Musk’s management: Tesla, SpaceX, xAI, X Corp, Neuralink, and OpenAI. If he didn’t get a 25% share, he threatened to develop his AI goods outside of the business. Investors are also worried that if the compensation plan was turned down, he might quit the firm.
Elon Musk’s 2018 salary schedule
In 2018, the board of Tesla approved Elon Musk’s performance-based remuneration plan as CEO. In summary, Musk was given the option to purchase 20.3 million Tesla shares over a ten-year period, which equates to around 12% of the company’s outstanding shares at the time. Instead of receiving a guaranteed salary or cash incentives, this was a one-time offer. The options were split into 12 tranches, each of which was subject to vesting based on operational and capitalization milestones for Tesla, which included reaching revenue of $175 billion and adjusted gross earnings of $14 billion. The capitalization milestones began at $100 billion and increased by $50 billion each, up to $650 billion. If all performance goals are reached, Elon Musk will get stock options valued at $56 billion under the plan.
A Delaware court rejected the package in January, finding that the package’s original approval procedure needed to provide shareholders with all relevant information. Even if the remuneration plan has been approved by the shareholders, the court may still need to reverse its decision. Tesla might circumvent Delaware court jurisdiction over the compensation plan, however, if it shifted its incorporation to Texas.
Elon Musk’s goal of creating human-like robots
Elon Musk said the company’s Optimus humanoid robots might increase Tesla’s market capitalization to $25 trillion at the 2024 annual shareholder meeting on Thursday, although he did not provide a timeframe. When the market closed on Thursday, Tesla’s valuation was $579 billion. It is noteworthy that in October 2021, the market value of the manufacturer of electric vehicles (EVs) surpassed $1 trillion.
Tesla demonstrated how Optimus Robots might do domestic chores like folding clothes. Elon Musk said that he thought humanoid robots might one day be able to educate kids and even cook. According to him, Tesla plans to start producing Optimus in small batches and anticipates having over a thousand, if not several thousand, robots in its fleet by 2025.
Meanwhile, this year’s highlights for the EV manufacturer include Cybertruck, Supercharge network, and autonomous vehicles. Elon Musk said that Cybertruck production hit a record 1,300 units per week.
Tesla does worse than the whole market.
Tesla’s stock has dropped 26% so far this year, behind the benchmark S&P 500, which has gained 14% thus far in 2024, and the so-called Magnificent Seven.
Tesla revealed a dismal first-quarter delivery total of 368,810, an 8.5% decrease from the same period the previous year. With $21.3 billion in sales, Tesla recorded a 9% decrease from the same quarter the previous year. Elon Musk’s announcement that the business wants to speed up the mass manufacturing of reasonably priced electric vehicles caused a 12% increase in Tesla’s stock that day.
