Tesla is asking its shareholders to again approve a $US56 billion ($86.9 billion) pay package for company CEO Elon Musk and support the electric vehicle giant's proposal to move the company to Texas. .
Tesla will ask shareholders to vote on the pay package at its June 13 annual meeting.
A Delaware judge blocked the stock compensation package in January 2024, nearly six years after the performance-based award was approved by Tesla shareholders in 2018.
The package will see Mr Musk paid $US56 billion ($86.9 billion) over a 10-year period.
When initially approved by Tesla shareholders, the company's shares were worth less than $25. Now, each one costs $150 and Tesla has become the world's largest electric vehicle manufacturer.
The Delaware Chancery Court found Tesla's board did not act in the company's best interests when it approved the payment package, saying there was “hardly any evidence of the negotiations” .
Several large US corporations such as Tesla and Facebook are incorporated in Delaware due to its lax tax approach towards companies that do not do business in the state.
In a letter to the US Securities and Exchange Commission, Tesla Chairman Robyn Denholm called on the brand's shareholders to once again approve the pay package without amendment, and affirmed that Mr. Do more than what was promised to the company.
“In 2018, we claimed incredible growth and achievements. Elon made the announcement: Tesla shareholders have benefited from unprecedented growth under Elon's leadership and Tesla met every target in its 2018 CEO pay package,” her letter read. Denholm wrote.
“The council stands behind this pay package. We believed that in 2018 when we asked Elon to pursue notable goals to grow the company. You, as shareholders, also believed in it in 2018 when you overwhelmingly endorsed it. Time and results only show the wisdom of our judgment.
“We disagree with what the Delaware Court decided and we don't think what the Delaware Court said is how corporate law should apply. So we're coming to you now so you can help fix this problem – it's a fundamental matter of fairness and respect for our CEO.
“We ask you to make your voice heard — again — by voting to approve Elon's 2018 compensation plan.”
Ms. Denholm also urged shareholders to vote in favor of a proposed merger of the company in Texas – which would accommodate the new headquarters in Austin.
“2024 is the year Tesla should move home to Texas,” the filing continues.
“We have a significant number of manufacturing, operations and engineering employees in Texas and our executives are based there.
“Texas is where we should continue to work toward our mission of accelerating the world's transition to sustainable energy, as we lay the foundation for our growth by expanding and building our factory for its future vehicles, while also helping meet energy storage needs. as well as our advancement in artificial intelligence through full self-driving systems and Optimus.
“We have received letters from thousands of Tesla shareholders – large and small – supporting the move to Texas. We have listened to you and now we are formally asking you to speak meaningfully: and vote in favor of bringing Tesla to our business headquarters in Texas.”
News that Tesla wants to move its entire corporate operations to Texas comes just days after a memorandum reported by foreign publications said the automaker would cut 10% of the global workforce.
Tesla also reported lowest quarterly revenue from 2022 to opening in 2024, in a rare event sales decreased instead of increased.
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