DIGIVESTASI -  Tesla Shareholders Approve Elon Musk’s $48 Billion Pay Package. Tesla shareholders have finally approved a compensation package for Elon Musk worth $48 billion, or approximately Rp786 trillion.

This approval greenlights the electric vehicle manufacturer to move its headquarters from Delaware to Texas, according to Carscoops on Friday.

Previously, Delaware Judge Kathaleen McCormick had rejected a $56 billion (approximately Rp916 trillion) compensation package proposed by Musk earlier this year, citing that Tesla's board was not sufficiently independent from Musk.

Despite the judge’s concerns, the company's shareholders have re-approved the package, influencing Tesla's lawyers to appeal the court's decision.

With Tesla's current stock price, Musk is set to receive around $48 billion (approximately Rp786 trillion).

Ahead of the vote, Tesla's board stated that approving this compensation package was necessary to keep Musk motivated and to prevent him from focusing on his various other companies.

The original compensation package was challenged in 2018 by Tesla shareholder Richard Tornetta. Tesla's lawyers are expected to meet with Tornetta and Judge McCormick in early July.

The Wall Street Journal mentioned that the recent vote might prompt the judge to reconsider her decision, as shareholder concerns from her ruling were addressed in the vote.

The compensation package, initially approved in 2018, consists of 12 tranches of stock options tied to 12 Tesla growth targets, all of which have been met.

Since Musk's compensation is tied to Tesla's stock, its value fluctuates with the company's share price. In 2021, it was valued at over $60 billion or Rp982 trillion.

Neither Elon Musk nor Tesla have disclosed the number of votes cast by investors or the percentage that approved the pay plan.

When first approved in 2018, 73 percent of Tesla shareholders supported Musk's compensation.

After the results were announced, Musk took the stage at Tesla’s annual meeting in Austin, Texas, and said to the audience, "I just want to start by saying, damn! I love you guys."

Business lawyer and partner at Grant Sheldon, Natela Shenon, stated that the basis of the judge's decision was that Tesla's board was deemed to be under Musk's control and not representing the shareholders' best interests.

"This implies that the judge believed Tesla shareholders would not approve the package, but now that shareholders have voted for it a second time with all the facts presented, the core of the judge’s argument becomes invalid. This clearly shows that shareholders support the pay package," she said.

In 2018, a special deal was approved by shareholders that Musk would not receive a salary from the company but would be compensated based on Tesla's growth and revenue targets.

However, this deal was nullified by the Delaware judge in January 2024, claiming that Musk had undue influence over the company's board.

This means the massive pay package is no longer binding but can still be awarded to Musk if a majority of shareholders approve it.

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