On the morning of June 13th Beijing time, Musk posted on his X account stating that currently, both shareholder resolutions of Tesla have been passed with a significant advantage. These two major issues are: CEO Musk's $56 billion (approximately RMB 400 billion) compensation plan, and whether the company's registered address will be relocated from Delaware to Texas, where its headquarters is located.
According to the Daily Economic News, as the CEO of the world's largest electric vehicle manufacturer, Musk never receives a traditional fixed salary, and his entire salary is linked to the company's market value and performance.
In 2018, Tesla approved Musk's 10-year long-term compensation plan, which includes 12 sets of market value and business objectives. If Musk can achieve all his goals, he will accumulate 12% of Tesla's stock options as a reward, which were worth approximately $56 billion at the time. This plan is also considered by foreign media to be the largest executive compensation plan in the history of the United States. Based on Tesla's current closing price on June 11th, these options are worth approximately $512 billion.
At that time, it seemed that achieving all of Musk's goals was not easy, as the market value target was as high as $650 billion, while Tesla's market value at that time was about $59 billion. However, shortly after the announcement of this long-term compensation plan, Tesla's development entered a fast lane, with a market value exceeding $1 trillion in 2021. Tesla also stated that in the six years after Musk's 2018 compensation plan was approved, he created over $735 billion in value for the company's shareholders.
As of the closing of the US stock market at 4pm Beijing time on June 13th, Tesla's market value was approximately $565.41 billion.
However, in 2022, some shareholders of Tesla sued Musk, claiming that he had spent most of his energy on other companies such as SpaceX, while using control over the company and board to finalize long-term compensation plans. Therefore, shareholders hope to abolish the plan.
In January of this year, a Delaware judge declared Musk's long-term compensation plan invalid on the grounds of "unfairness to shareholders". Regarding this, Musk stated that he plans to move Tesla's registered address from Delaware to Texas, which is another major decision that Tesla's shareholders will have to vote on in addition to Musk's compensation plan at this shareholder meeting.