Tesla Stockholders Approve Elon Musk's $56 Bln Pay Package, Moving To Texas

(RTTNews) - Elon Musk, the founder and CEO of Tesla Inc., turned victorious after shareholders approved two major resolutions during Thursday's annual general meeting, including his $56 billion pay package, which was voided by a Delaware judge earlier this year.

The luxury electric car maker's shareholders also approved a resolution to move its incorporation to Texas, the base of its largest U.S. factory. Tesla is now a Texas corporation, it said.

Following the news, Tesla shares gained around 3 percent to close at $182.47 on Thursday.

After the preliminary results were announced at the Tesla shareholder meeting, Musk said, "I love you guys."

The annual meeting featured final votes on many proxy proposals along with the pay package and move to Texas. Prior to the meeting, Musk in his social media platform X had thanked voting shareholders, noting that both Tesla resolutions were passing by wide margins, following which Tesla shares gained significantly.

In a statement, the company now noted that the stockholders approved the ratification of the 2018 chief executive officer Performance Award and the redomestication of the company to Texas. Tesla, which has submitted all filings to effectuate its conversion into a Texas corporation, confirmed that it is now incorporated in Texas.

The proposals included election of two Class II directors, James Murdoch and Kimbal Musk, to serve for a term of three years, or until their respective successors are duly elected and qualified.

A Tesla proposal to approve executive compensation on a non-binding advisory basis, as well as to ratify the appointment of PricewaterhouseCoopers LLP as Tesla's independent registered public accounting firm for the fiscal year 2024 also were approved.

Tesla will also file a Form 8-K with the Securities and Exchange Commission disclosing the vote tabulations certified by its inspector of election.

Musk's Tesla compensation package, which is considered the largest in U.S. corporate history, was initially approved by the shareholders in 2018. However, it faced severe scrutiny and was voided in January this year by Chancellor Kathaleen McCormick, who called it deeply flawed as the package was approved due to Musk's substantial relation with the Board.

Tesla shareholders were divided over the proposed pay package as some considered Musk is integral to Tesla's future success, while certain others said the compensation is too excessive and detrimental to the company's best interests.

Further, the resolution to move its state of incorporation to Texas from Delaware was put forward following a significantly positive response from Musk's followers in X after the Delaware judge's decision on the pay package.

Responding to the ruling, Musk then had stated, "Never incorporate your company in the state of Delaware. I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters."

In 2021, Tesla had moved its corporate offices from Palo Alto, California, to Austin, Texas, due to issues with the state's regulations as well as clashes with health officials regarding the opening of the Fremont facility during the pandemic period.

The latest developments come as the car maker is struggling with weak demand and tough competition in the U.S. and Europe, as well as in its major market of China.