Largest CEO Package In US? Tesla Made $16.51 Bn In 1 Day As Shareholders Okay Elon Musk's $56 Bn Salary

Amidst opposition from court and advisors, the shareholders of United States' largest EV maker, Tesla have approved the pay package of a whopping $56 billion to Elon Musk. The development received a thumbs-up from investors on the Nasdaq as Tesla's share price emerged among the biggest gainers on June 13. Tesla made a whopping 16.51 billion dollars in a single day.

Overnight, Tesla stock ended at $182.47, up by 2.92% on Nasdaq. the company's market value jumped by $16.51 billion on June 13, totalling to $581.93 billion.

Tesla is currently the thirteenth largest company in the world.

In the annual meeting of 2024, the stockholders of Tesla approved the proposal of a 100% performance-based stock option award to Elon Musk that was proposed to and approved by our stockholders in 2018.

It needs to be noted that this pay package has been opposed by the Delaware court along with advisors and other large investors. In January, the Delware court stated five months ago that the package was "unfathomable'.

A judge in a Delaware court stated that the board members of Teala lacked independence from Musk. And that they failed to negotiate at arm's length with the CEO.

Initially, the pay package was as much as $56 billion by Musk in Tesla stock. This is likely to be the largest CEO package in the US corporate history.

On June 13, Tesla stockholders overwhelmingly approved the ratification of the 2018 CEO Performance Award and the domestication of the Company to Texas.

Elon Musk tweeted at his own X which was earlier on Twitter, saying, "Both Tesla shareholder resolutions are currently passing by wide margins!"

During the annual meeting, after the votes were announced, Musk told the stockholders, "I just want to start by saying... I love you guys."

Some companies have reacted to Tesla's compensation to Musk.

Mathieu Shapiro, Managing Partner at OBERMAYER said, "I think voting on the package after it was overruled by the court is a fairly unprecedented move. I don't think this automatically invalidates what the judge did the first time around January. This will try to be used on either appeal or further proceedings with the judge. But again, that's fairly new territory and nobody knows how that's going to go," reported Reuters.

Further, Shapiro told the news agency "Now moving to Texas is a really interesting thing. The vast majority of large American companies are in Delaware and they're in Delaware because Delaware is generally viewed as a favorable jurisdiction for companies. So, it's kind of funny that they've taken this approach of 'Delaware stopped us from doing what we want. We're going to move to Texas.' Texas law on corporate governance is not anywhere near as developed as Delaware's. Nobody's is, and most states as a kind of first instinct look to Delaware law to figure out how to handle corporate governance issues."

Also, Douglas Chia, President of Soundboard Governance told Reuters that the vote would imply that the large institutional investors voted for the Texas reincorporation and ratification of pay, which indicates that investors don't care about either or don't see a real downside to either one. It's well-known that institutional investors don't generally object to pay packages and now we've seen that the sky's the limit.

As of June 14, 2024, Musk has reclaimed his spot as the richest man in the world. Holding the title, his net worth is at $207 billion. As per the Bloomberg Billionaire Index, with a bull run in Tesla shares, Musk gained up to 3.70 billion dollars overnight. However, his net worth is still broadly down by 22.5 billion dollars year-to-date.