The favorable vote doesn’t mean CEO Musk will get the all-stock compensation anytime soon. The package is likely to remain tied up in the Delaware Chancery Court for months as Tesla appeals the rejection.
Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.
Tesla also has struggled with falling sales and profit margins as demand for electric vehicles slows worldwide. Tesla has said it would appeal, but asked shareholders to reapprove the package at Thursday’s annual meeting. Legal experts say the issue of Musk’s pay will still be decided in Delaware, largely because Musk’s lawyers have assured McCormick they won’t try to move the case to Texas.
John Lawrence, a Dallas-based lawyer with Baker Botts who defends corporations against shareholder lawsuits, agreed the vote doesn’t end the legal dispute and automatically give Musk the stock options. But he says it gives Tesla a strong argument to get the ruling overturned. “Full Self-Driving” keeps improving with new versions, and its safety per mile is better than human drivers, Musk said.
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