Tesla shareholder meeting kicks off today, with over 1.3 billion votes in favor of Musk's high compensation

Tesla is set to hold its shareholders' meeting today, June 13th, and the vote on Elon Musk's $56 billion compensation package has just concluded. With over 13 billion votes in favor, surpassing the 10 billion threshold, supporting Musk to receive the deserved compensation, Musk also expressed his gratitude on Twitter for the support.

Elon Musk's Generous Remuneration Faces Legal Battle

According to previous reports, Elon Musk has not been receiving a fixed salary since 2018. Instead, he receives rewards similar to performance bonuses and dividends when certain milestones set by the company are achieved. Upon reaching these milestones, Musk can purchase Tesla stocks at a price of $23.34 per share, but with a 5-year lock-up period.

How does Tesla make money? Where does Elon Musk's generous remuneration come from?

However, Tesla shareholders have been somewhat dissatisfied with Musk's previous acquisition of Twitter, now renamed X, and have not been able to focus too much on Tesla's operations. This dissatisfaction culminated in a legal battle, where they demanded the court revoke the 2018 compensation plan awarded to Musk by Tesla's board of directors.

Judge Kathaleen McCormick ruled on the case in January, declaring the plan invalid. The judge believed that Tesla's board of directors lacked independence, was too influenced by Musk, and that the governance process for the allocation and stock price was "unfair" to other shareholders.

Tesla Small and Large Shareholders Vote Together

Therefore, ahead of the shareholders' meeting, Tesla invited all shareholders to vote online, hoping that with shareholders' re-approval, they could petition the court to reinstate the plan.

According to The New York Times, Ron Baron, chairman of investment fund management company Baron Capital, urged other shareholders to re-approve Mr. Musk's compensation plan in a letter, stating:

Without his tireless efforts and uncompromising standards, there would be no Tesla. Tesla is Elon!

Cathie Wood, CEO of Ark Invest, a staunch supporter of Tesla, also stated:

He has achieved remarkable success and should be rewarded accordingly.

Ark Invest has just released its expectations for Tesla's stock price yesterday, predicting it could reach $2,600 per share by 2029, showing strong confidence in Tesla's fundamentals.

Ark Invest Calls for Tesla to reach $2,600 by 2029; Musk: Challenging but Achievable!

More than 1.3 Billion Approving Votes, Impact on Court Ruling Remains Unknown

The voting has just ended, with over 1.3 billion approving votes surpassing the 1 billion threshold in support of reinstating Musk's compensation plan. This will affect approximately 7% of Musk's Tesla holdings.

However, even with the shareholders' approval, there is no clear provision on whether it will affect the court's ruling. Tesla also acknowledges in a regulatory filing that approving votes "may not fully resolve the issue."