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Tesla shareholders have approved a package of $45 billion (about Rs 3.7 lakh crore) from CEO Elon Musk. The results of the vote were declared on Thursday. Recently, this package of Musk was challenged by some shareholders in the Delaware Court.
Elon Musk appeared very happy after the package got the approval of the shareholders. Coming on stage during the annual meeting at Tesla’s headquarters, Musk said – ‘I just want to start by saying, hey, I love you guys!’
Relief for people supporting Musk
This result is a relief for the people who support Musk. This is because they feared that if this package was rejected, Musk would spend less time in Tesla’s management or might even decide to leave the company. Tasha Keeney, director of investment analysis at ARK Invest, said- I think it is important for Musk to remain at the top.
This decision is a blow to those investors who were hoping that the rejection of Musk’s package would send a message regarding the limit on CEO payments. “This is a higher pay package than we’ve seen in the United States, and I don’t think it sets a good precedent,” said Kristin Hull, founder and chief investment officer of Nia Impact Capital.
Elon Musk’s package was prepared in 2017
- Tesla had prepared Musk’s payment package in 2017, in which it was decided to give stock options to the CEO in 12 different installments. There was a condition in this package that this package would be available only if the revenue and market target set by the company is achieved.
- 73% shareholders approved this package of Musk. According to Tesla’s share price, earlier the value of this package was 56 billion dollars (about Rs 4.67 lakh crore), which has increased to 45 billion dollars (about Rs 3.7 lakh crore) due to the fall in the stock price.
- Some shareholders had recently filed a lawsuit claiming that the package was unfair. After this, Kathleen St. J., Chancellor of the Court of Chancery in Delaware. McCormick canceled it. The judge said that the process of deciding the package was not proper.
90% retail investors voted in favor of the package
Tesla’s board appointed Kathleen St. This voting was conducted in response to this decision of McCormick. 90% of retail investors voted in favor of this package.
What is a stock option?
Stock option means giving shares to the company’s employees. After receiving the shares, the employee can earn profit by selling these shares as per the terms and conditions.
