May 23, 2024

The Queens County Citizen

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Tesla is sticking with Elon Musk's massive compensation plan

Tesla is sticking with Elon Musk's massive compensation plan

(NEW YORK) Car maker Tesla will once again present to its shareholders, at its next general meeting in June, its boss Elon Musk's massive pay plan that was struck down by a Delaware judge in late January.

“The board supports this compensation plan. We believed that in 2018, asking Elon to pursue ambitious goals to grow the company. You, as stakeholders, believed in it even when it was overwhelmingly approved in 2018. Time and results have only demonstrated the wisdom of our judgment,” argued the American automaker's board of directors in preparatory documents published Wednesday.

It's a new twist in a long-running dispute over the plan, which was authorized by the carmaker's board of directors in 2018.

He plans to give Elon Musk Tesla shares based on the achievement of several goals over ten years. It was estimated at $56 billion when adopted.

An amount far from pleasing all shareholders. In late January, a judge in a court in the eastern United States state of Delaware ruled in favor of one of the plaintiffs who demanded the plan's repeal.

10% positions are eliminated

The judge held that shareholders had received “false” and “misleading” information about the board of directors and the remuneration committee before the general meeting where the plan was approved.

A ruling that Tesla's board of directors is investigating. In preparatory documents published Wednesday, the latter company specifically wrote that it “would not be where it is today without Mr. Musk's contribution, leadership and vision.”

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“We believe this requires a compensation plan that recognizes Mr. Musk's unique role and, more importantly, provides adequate incentives for Mr. Musk to remain at Tesla and devote time to his operations and its business. He has a level of dedication to the business that we believe is critical to achieving the ambition to grow the business over the long term,” The board continues.

He also indicated that Tesla's registration transfer from the state of Delaware to Texas would be put to a shareholder vote, as his employer had already announced.

In a crusade against this American state, Elon Musk recently moved the headquarters of his other company, SpaceX, from Delaware to Texas.

The company also canceled layoffs of 10% of its global workforce, or at least 14,000, announced earlier this week.

The measure is justified, according to her, by the need for “cost reductions and productivity improvement”. “Over the years, we've had rapid growth with multiple factories around the world,” which led to “duplication of roles and functions in some locations.”

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