The measure to approve the previously proposed performance-based compensation plan for Tesla CEO Elon Musk passed with around 80% support, with around 73% of votes cast, the company revealed in a new Securities and Exchange Commission (SEC) filing.
So, despite Elon Musk and his brother Kimbal Musk both abstaining from the vote (together accounting for a large proportion of Tesla’s total stock), the measure passed by a large margin.
It’s noteworthy, though, that it has now come out that Norway’s sovereign wealth fund voted against approval of the compensation plan. The Norwegian sovereign wealth fund currently owns a ~0.48% stake in Tesla (~$250 million). No reasons were publicly given for the decision, so speculation has varied quite a bit to date.
As we’ve discussed before, the performance-based compensation plan promises the Tesla CEO nothing just for working, but it provides a pathway towards a payout worth ~$2.6 billion — presuming that some difficult-to-achieve goals are met (which would greatly benefit shareholders).
Reuters provides more: “The compensation award includes no salary or cash bonus for the Silicon Valley billionaire, but sets rewards based on Tesla’s market value rising to as much as $650 billion over the next 10 years. … Musk could own as much as $55.8 billion in Tesla stock and more than a quarter of the electric car company in the next decade if he hits all targets of the new plan.
“Compensation for the CEOs of large US companies is typically approved by around 95% of votes cast in annual ‘say on pay’ advisory votes. Musk’s potentially huge payout meant extra scrutiny. The vote total was 63,014,339 ‘for’ votes and 23,407,632 against.”
Overall, I’d take those numbers as a sign that most Tesla shareholders are all-on-board with the company’s current highly aggressive expansion plans, which seems to fly in the face of the allegations made by some industry observers that Tesla’s shareholders are getting impatient with company’s unwillingness to focus on short-term profit at the expense of market conquest.
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