Tesla plans to leverage Elon Musk's big pay win in Delaware court battle
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Tesla plans to leverage Elon Musk's big pay win in Delaware court battle
SAN FRANCISCO (Reuters) - Tesla (TSLA.O), opens new tab will use Thursday's strong support for Elon Musk's $56 billion pay package to try to win over a Delaware judge that invalidated his 2018 agreement, the company's board president said Friday.
The long process to reaffirm the largest-ever corporate pay package ended Thursday, when nearly three-quarters of shareholders - excluding Musk and his brother - voted in favor of the deal, overcoming opposition from a number of institutional investors and proxy advisory firms.
The support was roughly in line with 2018's vote that was invalidated in January by Delaware judge Kathaleen McCormick. The legal fight to recognize Thursday's vote could start on Friday, as the approval does not resolve that lawsuit.
The decisive vote confirms the company's commitment to the 2018 deal, Tesla board chair Robyn Denholm said in a letter to shareholders on Friday. "We intend to put it back in front of the court in Delaware to ensure that your voices as owners of our company are heard," she wrote.
McCormick in January called the package an "unfathomable sum" granted by a conflicted board with close personal and financial ties to CEO Musk.
Vanguard, Tesla's largest shareholder after CEO Musk, voted in favor and played a major role in passing the pay deal after first disapproving it in 2018, a note seen by Reuters showed.
Investors hope the win will help Musk focus his attention more on Tesla, whose shares have slumped as sales of electric vehicles slowed and Musk purchased social media platform Twitter, later renamed X. Tesla shares fell nearly 2% in trading on Friday.
