Elon Musk's $1 Trillion Compensation Package Isn’t The Only Thing In Spotlight Today: A Look At Other Tesla Proposals Up For Vote

• Tesla shareholders will vote on whether to create share reserves to award the company’s employees, including Musk.
• Three directors are up for re-election this year, including venture capitalist Ira Ehrenpreis, Airbnb co-founder Joe Gebbia, and former Walgreens Boots Alliance executive Kathleen Wilson-Thompson.
• Shareholders will also vote on whether the Tesla Board must authorize investments in Musk’s AI startup xAI.
   

As Tesla’s annual shareholder meeting draws near, investors are focused on whether CEO Elon Musk’s whopping new $1 trillion pay package will be approved.

However, there are a few other proposals scheduled for a shareholder vote.

Replenishing General Share Reserve

One of the key proposals shareholders will vote on is whether to replenish the company’s general share reserve with over 60 million shares to award current and future Tesla employees. Tesla is known for rewarding employees with stock awards in addition to salary and benefits. None of these 60 million shares, however, will be used to award CEO Musk, the company said.

Tesla is also seeking to create a special share reserve with nearly 208 million shares to eliminate the uncertainty surrounding Musk’s 2018 pay package, valued at over $50 billion, after it was voided by a Delaware court last year. Musk appealed the court’s order in March.

The special share reserve will enable the board to grant the outstanding shares that Musk earned under the 2018 CEO Performance Award at any time and at its discretion, irrespective of the outcome of the ongoing legislation, without requiring further shareholder votes.

Director Re-Election

Furthermore, three directors are up for re-election this year, including venture capitalist Ira Ehrenpreis, Airbnb co-founder Joe Gebbia, and former Walgreens Boots Alliance executive Kathleen Wilson-Thompson. If re-elected, they will serve for a three-year term expiring in 2028.

Ehrenpreis is a founder and managing member of DBL Partners, Chairman of the VCNetwork, and President of the Western Association of Venture Capitalists. According to Tesla, a total shareholder return of 39,140% has been overseen since Ira joined the Board in 2007 through the end of the third quarter.

While Gebbia joined the Tesla Board in 2022, Wilson-Thompson has been a member of the Board since December 2018.

Investing In xAI

Shareholders will also vote on whether the Tesla Board must authorize investments in Musk’s AI startup xAI and whether to approve a child labor audit across the company’s supply chain, in addition to other proposals.

While the board has made no recommendation on the proposal regarding an investment in xAI, it has recommended a vote against the proposal requesting a child labor audit, terming it unnecessary.

Key Proposal

The key proposal in the spotlight, however, will be whether shareholders approve Musk’s new $1 trillion compensation plan. According to the new pay plan proposed in September, Musk will receive no salary but will be awarded up to 423.7 million shares of Tesla in installments over 10 years, contingent upon the company meeting certain milestones, including increases in earnings, vehicle deliveries, robotaxis, and humanoid robots.

The new package is designed to deliver approximately 12% more voting power to Musk in exchange for driving performance growth, including by taking the company’s total market capitalization to $8.5 trillion.

Tesla Board Chair Robyn Denholm has previously warned that Musk might leave if the package is not approved.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around TSLA stock stayed within the ‘bearish’ territory over the past 24 hours, while message volume rose from ‘low’ to ‘normal’ levels.

TSLA stock is up 14% this year and approximately 60% over the past 12 months. 

Also See: DuPont Announces $2 Billion Share Buyback: Why Did The Stock Tumble 7% Today?

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