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Tesla shareholders have voted to ratify CEO Elon Musk’s monumental 2018 compensation plan, despite a Delaware court’s earlier ruling to rescind the package. This decision was made during Tesla’s annual meeting, held in Austin, Texas, and marks a significant public relations victory for Musk as he continues his efforts to secure his performance options in the future.
Following the announcement of the preliminary results, Musk took the stage, expressing his gratitude and excitement. “I just want to start off by saying hot d—! I love you guys,” he said to an enthusiastic audience.
The compensation package, initially valued at up to $56 billion in Tesla stock, was criticized by a Delaware court in January for being “unfathomable.” Judge Kathaleen McCormick determined that Tesla’s board members lacked independence from Musk, did not properly negotiate the terms, and failed to fully inform shareholders before the initial vote on the pay plan.
Despite these judicial findings, Tesla’s stock rose by 2.9% in regular trading on Thursday, closing at $182.47. This increase followed Musk’s optimistic post on social media platform X, indicating that the proposal was poised for approval. Nevertheless, Tesla shares remain down 27% for the year amid declining sales and heightened competition in China.
During the annual meeting, shareholders also voted on several other proxy proposals, including a notable decision to move Tesla’s incorporation from Delaware to Texas, the location of its largest U.S. factory. This move was supported by a majority of the shareholders.
At the previous shareholder meeting in May 2023, Musk forecasted economic improvements within 12 months, promised the delivery of production Cybertrucks by the end of 2023, and announced Tesla’s foray into advertising. Recent economic indicators suggest some improvement, and Tesla has indeed begun Cybertruck deliveries and advertising, including on X, which Musk acquired for $44 billion in 2022.
Musk also reassured shareholders that he would reduce his time spent on X, which he described as a “short-term distraction.” However, Musk continues to be deeply involved in various ventures, including SpaceX, Neuralink, and the newly founded xAI, which focuses on developing AI technologies.
At the meeting, Musk, in his characteristically optimistic manner, highlighted Tesla’s progress in vehicle autonomy. He predicted that advancements in self-driving technology could potentially “10x the value of the company.” Despite Musk’s assurances, Tesla has yet to deliver on fully autonomous technology, while competitors like Pony.ai, Didi, and Waymo have already launched commercial robotaxi services.
Musk also reiterated Tesla’s ambition to create a ride-hailing network with Tesla vehicles equipped with self-driving systems, though he did not provide a specific timeline for this development. Additionally, Musk updated shareholders on the Cybertruck, reporting that deliveries have increased, with a weekly record of 1,300 shipments.
Looking ahead, Musk promised that Tesla would enter “limited production” of its humanoid robot, Optimus, by 2025, with plans to test these robots in its factories next year. He predicted that by next year, Tesla would have “over 1,000, or a few thousand, Optimus robots working at Tesla.”
