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14/06/24
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Tesla Will Leverage Musk’s Pay Win in Delaware Court Fight
On Friday, Tesla’s board president said the company would use Thursday’s strong support for Elon Musk’s $56B pay package in an attempt to win over a Delaware judge that invalidated the pay agreement made in 2018.
The long process to confirm the biggest-ever corporate pay package ended on Thursday, when nearly 75% of shareholders voted in favor of the deal. This overcame opposition from several proxy advisory firms and institutional investors.
The support was about the same as the vote in 2018 that Delaware judge Kathaleen McCormick invalidated in Jan. The legal battle to recognize the vote may start on Friday, as the approval doesn’t resolve that lawsuit.
In a letter to shareholders, Tesla board chair Robyn Denholm said the decisive vote confirmed the company’s commitment to the previous deal. He added Tesla intended to place it back in front of the Delaware court to ensure that the voices of owners of the company are heard.
In January, McCormick said the package was an “unfathomable sum” granted by a conflicted board with close financial and personal ties to Musk.
A note seen by Reuters showed Tesla’s biggest shareholder after CEO Musk, Vanguard, voted in favor and played an instrumental role in passing the pay deal after disapproving it in 2018.
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