Tesla Seeks to Revive Musk’s $47 Billion Pay Deal With New Shareholder Vote
Facing criticism that it is overly beholden to Elon Musk, Tesla’s board of directors said on Wednesday that it would essentially give him everything he wanted, including the biggest pay package in corporate history.
If setbacks in court and the car market have induced any soul searching among Tesla’s board, there was no sign of it in the latest announcement. If anything, the board doubled down on backing Mr. Musk, Tesla’s chief executive, risking riling up activist investors and more litigation.
The board’s decision to ask shareholders to endorse a compensation plan for Mr. Musk that is worth about $47 billion came less than three months after a Delaware judge voided the same 10-year pay package. The judge said that it was excessive and that the company had failed to properly disclose details about it to shareholders who approved it in 2018.
Tesla will now provide shareholders more information about how the plan was devised and ask them to approve it again. That vote will take place as investors are increasingly worried about the electric car company because its sales are declining, and its stock has fallen more than one-third this year. In addition, Mr. Musk has not presented much of a plan to restore the company’s momentum.
Lawyers who represented shareholders in the Delaware case were not immediately available for comment Wednesday on steps they might take. But the board’s action is likely to prompt more lawsuits against the company, which is under legal pressure from regulators, customers and people who say they have been victims of faults in Tesla’s driver-assistance system.
Two days before the move to restore Mr. Musk’s status as one of the world’s richest people, Tesla told employees that it would lay off 10 percent of its work force, or about 14,000 people.