Elon Musk addresses shareholders

Elon Musk addresses shareholders

Elon Musk

  • Tesla’s dedicated page related to the annual meeting calls upon shareholders to vote and explains various ways of voting.
  • A contentious issue that would come up for discussion is Musk’s 2018 pay plan, with some legal experts saying it needs unanimous approval.

Tesla, Inc.‘s  annual shareholder meeting scheduled for August is vital for the electric vehicle maker as it has played a gambit by bringing the now-nullified Elon Musk’s pay package back to the table. The desperation of getting a deal done is evident from the frantic calls by the board and more recently by the man himself.

On Saturday, the billionaire made an impassioned plea to shareholders to vote at the annual event, although he did not explicitly request to approve his pay package.

What Happened: “Please take a moment to vote your Tesla shares and let us know if you encounter any issues with voting,” said Musk in a post. The billionaire commented as Tesla influencer and investor Sawyer Merritt shared new instructions from the company regarding voting at the shareholder meeting.

In a dedicated webpage, Tesla emphasized the role of Musk in creating value for shareholders. “Thanks to Elon Musk’s vision and leadership, Tesla has created tremendous value for you, the owners of the Company, all while advancing its mission to accelerate the transition to sustainable energy,” the company said.

“Stockholders, we need your vote.” The company gave instructions for voting by phone, online, by QR code, and by mail.

Among the company-sponsored proposals to be voted at the shareholder meeting are approval of the 2018 CEO performance award, which a Delaware Chancery Court nullified, and shifting Tesla’s state of incorporation to Texas.

Why It’s Important: There has been a raging debate over Tesla’s move to re-up the 2018 pay plan, with some, including legal experts, opining that potential approval would mean paying somebody for past work and doesn’t really benefit the company.

While sell-side analysts mostly believe the proposal will receive shareholder greenlight without any trouble, Ann Lipton, Associate Professor of Business Law and Entrepreneurship at Tulane University Law School, said it might have to be approved unanimously and not by a simple majority, as has been the typical norm.

In 2018, the proposal received a nod from shareholders representing 73% of the outstanding shares.

Tesla Chair Robyn Denholm recently released a video, requesting shareholders to vet the $47 billion plan, a reduction from the originally approved $56 billion amid a pullback in the shares.

On the other hand, Leo KoGuan, who reportedly has a 0.8% interest in Tesla, has sharply criticized Musk for wanting a controlling stake in the EV maker. To gain a controlling stake, the billionaire needs to pick up 10% more shares.

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