Tesla Shareholders Approve Elon Musk's Massive Pay Package

Tesla shareholders have approved a record-breaking pay package for CEO Elon Musk, valued at more than $47 billion. This package, composed of 303 million stock options, was initially dismissed by a Delaware judge earlier this year due to flaws in the approval process. The Delaware Chancery Court Chancellor, Kathaleen McCormick, ruled that the process of awarding Musk these options did not meet the required fairness standards.^[1]  

In response to the Delaware ruling, Tesla shareholders also approved moving the company's state of incorporation to Texas. This shift might allow Tesla's board to grant new stock options to Musk, although this could have negative tax implications compared to reinstating the previous package.

Musk, who receives no cash salary or bonus from Tesla, has been working without compensation for over a year, as he had already met the financial targets required for the last of his 2018 options. He has expressed the need for additional stock options to maintain his influence and drive Tesla’s growth in AI and robotics. Currently, Musk holds approximately 13% of Tesla’s stock, but he aims for around 25%.

Musk’s compensation exceeds the total revenue of Tata Motors reported at $52.44 billion for the financial year 2023-2024 (FY24).^[2]   

For FY24, Tata Motors reported record revenues of $52.44 billion, with an all-time high EBITDA of $7.52 billion and a net profit of $3.8 billion.

Musk’s pay package not only surpasses Tata Motors but also eclipses the total revenues of other major Indian entities, including:^[3]  

Hindustan Petroleum Corporation Ltd (HPCL): $52.09 billion

State Bank of India (SBI): $40.35 billion

Tata Consultancy Services (TCS): $29.04 billion

However, it falls short when compared to:

Reliance Industries Ltd (RIL): $108.62 billion.

Life Insurance Corporation of India (LIC): $96.10 billion.

Indian Oil Corporation (IOC): $93.84 billion.

Oil and Natural Gas Corporation (ONGC): $77.54 billion.

Musk is currently one of the highest-paid CEOs in the world. According to data issued by Equilar for The Associated Press, the median pay package for S&P 500 US CEOs in 2023 was $16.3 million, making Musk’s earnings at least 250 times greater.

According to CEOWORLD magazine, the top five highest-paid CEOs in the world in 2023 were:

Sundar Pichai of Alphabet: $226 million.

Broadcom's Hock Tan Broadcom: $161.83 million.

Palo Alto Networks' Nikesh Arora: $151.43 million.

Sue Y Nabi of Coty Inc: $149.43 million.

Christopher Winfrey of Charter Communications: $89.08 million.

Recently, Elon Musk decided to dismiss the lawsuit against OpenAI and its co-founders, Sam Altman and Greg Brockman. Sued in the California state court, the lawsuit was dismissed with prejudice on June 11th, the day after Musk openly denounced OpenAI’s new collaboration with Apple.