Elon Musk urges Tesla shareholders to vote on pay with special offer

Tesla CEO Elon Musk is encouraging Tesla shareholders to vote on their shares with the offer of a chance to win a personally guided tour of the company's Texas plant as the board asks shareholders to reinstate his $56 billion pay package.

Tesla is offering shareholders the chance to win a tour of the Tesla Gigafactory in Austin, Texas, and the manufacturing lines for Cybertruck and Model Y that would be guided by Musk and Tesla Chief Designer Franz von Holzhausen. 

The tour would occur on June 12, and the winner would have a reserved seat at the Tesla annual stockholders' meeting on June 13 when voting will be finalized – though shareholders may vote online beforehand.

The announcement notes that Tesla shareholders "should only submit proof that you voted, not how you voted. You do not need to vote for or against any proposals to be eligible for entry." Stockholders are eligible to vote if they were a stockholder of record or a beneficial owner as of the close of business on April 15, and if they submit proof of their vote by midnight on June 7.

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Musk shared a post from Tesla on X, formerly Twitter, that provided information about the content and informed shareholders "Please let us know if you have any questions about voting your Tesla shares!"

Musk's $56 billion compensation plan, which was by far the largest among CEOs of publicly-traded U.S. companies, was struck down by a Delaware judge in January. 

The judge ruled that Tesla's board of directors didn't adequately disclose their personal ties to Musk and that the company was on pace to meet most of the plan's benchmarks. Due to the lack of those disclosures to shareholders, the compensation plan's excessive size resulted in it being voided by the judge.

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Musk responded to the ruling by pushing for Tesla to change its state of incorporation from Delaware to Texas, which is another item that is being presented to shareholders for them to vote on at the annual meeting.

Tesla's website has a page encouraging shareholders to vote and outlining its position on the pay package. 

The company wrote that since the compensation plan was approved by shareholders in 2018, Musk has delivered a total shareholder return of nearly 1,100% and that if he had "failed to achieve unprecedented growth targets for Tesla, he would receive ZERO compensation. He did not fail."

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It added that Musk is required to hold exercised options for at least five years after the option is exercised to incentivize him to push for the EV-maker to continue its growth in the future.

The board of directors has proposed the reinstatement of Musk's pay package, which has no salary or cash bonus and offers rewards in the form of stock options that are awarded based on Tesla's market value rising to as much as $650 billion over the 10 years following 2018. The company is currently valued at about $571.6 billion, according to LSEG data.

Proxy advisory firm Glass Lewis urged Tesla shareholders to reject the staggering package, citing its "excessive size" as well as the impact of Musk exercising the stock options and the concentration of the company's ownership.

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The firm also cited Musk's "slate of extraordinarily time-consuming projects" which have increased following the acquisition of Twitter, now known as X, where Musk serves as chief technology officer and executive chairman. Musk is also the CEO of SpaceX and artificial intelligence startup xAI, and is the founder of Neuralink and The Boring Company.