Tesla will ask its shareholders in June to ratify a multi-billion-dollar 2018 pay package for CEO Elon Musk that was squashed by a US court earlier this year.
A judge in Delaware Chancery Court in January voided Musk's compensation package worth as much as $55.8 billion. Photo: ETIENNE LAURENT / AFP/FileIn an SEC filing Wednesday, the board of directors for the US automaker said it"stands behind this pay package. We believed in it in 2018, as we asked Elon to pursue remarkable goals to grow the company. You, as stockholders, also believed in it in 2018 when you overwhelmingly approved it.
The proposals come amid a difficult stretch for Tesla, whose shares have fallen 37 percent so far in 2024 compared with about a 6.5 percent gain in the S&P 500.That move comes about 10 days after Tesla reported a drop in first-quarter auto deliveries in a decline seen as reflective of rising competition among electric vehicle producers and slowing demand growth in some markets.
"The proxy and shareholder meeting combined with the current state of affairs at Tesla all sets up for more fireworks over the coming months," said Wedbush analyst Dan Ives in a note.Ives said Musk needs to address market speculation that the company is shelving plans for a mass-marketed EV at a lower price point. The much-anticipated project has often been referred to as"Model 2.
"We believe no Model 2 rollout in the next 18 months would be a disaster gamble that would likely change the growth story of Tesla the next few years," Ives said.
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