TESLA SHAREHOLDERS APPROVE ELON MUSK'S MASSIVE US$56 BLN PAY PACKAGE

AUSTIN (USA), June 14 (Bernama-dpa) -- Tesla shareholders have reapproved a multi-billion-dollar pay package for CEO Elon Musk after a US court overturned the original 2018 deal in January.

The reapproval, granted at Tesla's annual general meeting on Thursday, does not guarantee Musk will receive the package, as he may still face further legal challenges over the US$56 billion deal, reported German news agency dpa.

Shareholders also voted in favour of moving Tesla's legal headquarters from Delaware to Texas, the company said after the meeting.

In 2018, a majority of 73 per cent of shareholders voted in favour of granting tech billionaire Musk the share package, which included the right to receive millions of Tesla shares in instalments if the company met a number of ambitious targets over up to 10 years.

However, one shareholder sued against the decision.

A Delaware judge later ruled that Musk, as part of Tesla's board of directors, had had too much influence from the sidelines of negotiations on the generous remuneration.

The judge argued that the shareholders had been kept in the dark about his involvement, meaning they didn't have the opportunity to make a considered decision.

The deal on the table provides for Musk to receive some 300 million Tesla shares in instalments at the 2018 price if Tesla meets a series of goals up to 10 years, including an increase of its stock market value from some US$50 billion to US$650 billion.

Based on this target, the value of the package was once estimated at around US$56 billion.

After rapid growth and thanks to the hype surrounding electric cars at the time, Tesla quickly reached the US$650 billion target. At times, the company's stock market value even exceeded US$1 trillion, meaning Musk's remuneration package was temporarily worth around US$100 billion.

Demand has since slowed down significantly and Tesla is now worth around US$580 billion on the stock market.

In recent months, Musk had threatened that he could push ahead with the development of artificial intelligence products elsewhere if he did not get more voting control, which would be granted by the pay package. This triggered a new investor lawsuit in Delaware on Thursday.

--BENAMA-XINHUA