[ad_1]
The new vote does not mean Musk will automatically receive the share package, but it does improve his chances of doing so. Musk had already said the night before that a large majority wanted the applications approved. As the company announced at its annual shareholder meeting on Thursday, shareholders also voted to move Tesla’s registered office from Delaware to Texas.
The 2018 pay package was overturned by a Delaware court after a shareholder lawsuit. Delaware Chancery Court Judge Kathryn McCormick spoke of the “unbelievable amount in the largest compensation package ever” in her ruling. Musk’s pay package is the largest ever agreed for an executive.
Former director: It’s a big deal for shareholders
Plaintiff Richard Tornetta argued that Musk was only a part-time boss at the time. However, Tesla’s board of directors took the position that Musk was paid so much to ensure that one of the world’s most dynamic entrepreneurs continued to focus on the electric car maker. Antonio Gracias, a former Tesla director, called the compensation package “significant for shareholders” because it led to Tesla’s extraordinary success.
Musk himself said in November that when the deal was reached in 2017, he thought the then-struggling company had little chance of success. At the time, he was also fully focused on Tesla and did not dictate his payment terms in any way.
Expect shareholder meetings to be turbulent
Tesla and CEO Musk have been through turmoil ahead of the shareholder meeting. Shortly before the shareholder meeting, a major shareholder sued Musk for insider trading. In a statement of claim, pension fund ERSRI, which holds 140,000 Tesla shares, called on the court to order Musk to repay the billions of dollars in “illegal profits” that the Tesla boss made from selling Tesla shares using insider information.
Musk and his brother, Tesla director Kimbal, sold a total of $30 billion (28 billion euros) worth of shares in the electric car maker between late 2021 and late 2022, before the news broke, causing the share price to fall, the lawsuit said in Delaware Chancery Court.
Musk allegedly sold the shares despite knowing that Tesla’s new car deliveries were lagging far behind official plans. The subject of an official investigation is whether Musk violated U.S. securities laws when he bought Twitter shares in 2022.
Sales fall for the first time in four years
Professional investors, in particular, are apparently slowly losing patience with Musk and are liquidating their holdings. Major investors are concerned that Musk is being distracted by other ventures like SpaceX, Neuralink, and X, and that his often controversial statements are hurting Tesla’s reputation and sales.
The electric vehicle pioneer’s sales figures fell for the first time in four years in the first quarter, with weakness in the current electric vehicle market playing a role, as well as growing competition from established automakers and new rivals from China.
The model is getting old
In addition, Tesla’s model lineup is now older and has gaps. The company said Tesla has been slow to update its aging models because high loan interest rates have curbed customers’ appetite for large purchases.
For example, Tesla will not bring a modernized Model Y to market this year. “The Model Y will not be redesigned this year,” Musk said, adding that Tesla is constantly improving its cars, “so even a six-month-newer car is going to be a little bit better.”
High loss stocks
Tesla, and Musk, have also been affected by a sharp drop in its share price. Since the beginning of the year, Tesla’s stock price has fallen by about 30% and is now more than 50% away from its all-time high since 2021. For many years, major institutional investors have been more willing to accept valuations of technology companies than automakers.
Now the tide seems to be turning. Data from fund analysis firm Morningstar shows that of the 18 mutual funds that have held Tesla shares since 2019, 10 have reduced their holdings, of which four have reduced their holdings by 15% or more. Only five funds have bought.
This does not mean that investors have given up on Tesla. Of the experts surveyed by financial services provider London Stock Exchange Group (LSEG), 19 recommended buying the stock and 10 recommended selling it. Tesla remains the world’s most valuable automaker, with a market value of more than $560 billion (€521 billion). Toyota Motor is the world’s number one in the auto market, with a market value of about $334 billion (€311 billion).
[ad_2]
Source link
