This year, Tesla's shareholders' meeting will decide on two major issues
This will be a "smoky" conference that will determine whether Musk's $56 billion compensation plan is approved, and whether the company's registration will move from Delaware to Texas
Although shareholder meetings are usually routine and uneventful, Tesla's shareholder meetings have always been full of "news events."
Tesla will hold a crucial annual shareholder meeting on June 13, which will be a "smoky" event. According to media reports on Monday, shareholders at this meeting will need to vote on two major issues: CEO Musk's $56 billion compensation plan and whether the company's registration should be moved from Delaware to its headquarters in Texas.
To ensure the proposals are passed, Tesla has even set up a website specifically for this purpose, hoping that its large retail investors can vote in favor.
Regarding Musk's $56 billion sky-high compensation plan, Ross Gerber, CEO of California-based Gerber Kawasaki Wealth & Investment, voted in support of Musk's compensation plan, stating:
"Despite Tesla's performance falling far below our expectations over the past 12 to 18 months, Musk has achieved remarkable results over the past 10 years."
Third-party shareholder advisory firm Glass Lewis has publicly opposed the plan, stating:
"The compensation plan will excessively dilute the rights of existing shareholders and is 'too large,' and the proposal to move to Texas will bring 'uncertain benefits and additional risks' to shareholders."
The stance of the third-party advisory firm ISS on the proposal has not yet been disclosed. These two companies are the largest independent shareholder advisory firms in the United States, and their recommendations have a significant impact on investors' voting decisions.
Analysts say that Musk's leadership and innovation are the main reasons for Tesla's premium stock price. If the compensation plan is rejected, it could exacerbate uncertainty about the company's future direction and leadership.
In January of this year, Musk expressed dissatisfaction with his current stake, stating that if he did not have about 25% of the voting control, he would feel uneasy, otherwise he would prefer to develop products outside of Tesla.
It is worth noting that Musk has not taken a cash salary from Tesla since 2019. He holds Tesla stock and options, and under a 2018 compensation plan, if the company achieves specific financial goals, he will unlock option rewards in batches, buy more shares at a lower price, and then sell them to generate substantial income. In early 2023, Musk received the final batch of remaining options granted to him under the 2018 compensation plan.
In addition, shareholders will also need to vote on whether the company should move its registration from Delaware to Texas. Analysts believe that the board is closely watching the voting results, but it is currently difficult to predict which proposals will be approved.
At the previous shareholder meeting, Musk confirmed the release date of the Cybertruck, former Chief Technology Officer JB Straubel joined its board, and Musk refuted rumors of stepping down as CEO This year's Tesla shareholders' meeting results not only affect the company's development strategy and compensation system, but may also impact stock price performance. Due to the lack of new products in recent years and relying more on price reductions to maintain market share, Tesla has fallen nearly 30% since the beginning of the year.
