In a recent post on X, Elon Musk announced that 90% of retail shareholders who have voted so far, have voted in favor of two key resolutions ahead of the upcoming shareholder meeting on June 13th.
The Resolutions
These resolutions are two major pieces for Tesla – the first being Musk’s compensation package re-approval, and the second being to move the company’s location of incorporation from Delaware to Texas.
Both resolutions stemmed from a recent Delaware ruling that the 2018 shareholder vote that decided Elon Musk’s compensation package was invalid. Musk’s compensation package was a performance-based package that would pay out in share options – not exercisable until at least 2027. These shares total about $56 billion USD in compensation.
These resolutions have been met with some controversy within the Tesla community, with some shareholders arguing that the compensation package is excessive, and that the reincorporation decision was made without proper shareholder consultation or proper corporate research.
Percentage Needed to Win Vote
In terms of the resolutions, the resolution to re-approve the performance-based pay package only requires a majority vote for the number of shareholders that decided to vote. This means that shareholders that did not vote their shares will be treated as if they abstained, and these shares will not count against the vote.
For the move to Texas, an absolute majority of 50% of all shares is required.
Overwhelming Support
Tesla’s retail shareholders – who own approximately 40% of the company – or 47% relatively if you factor out Elon Musk and Kimbal Musk’s ownership (who cannot vote due to conflict of interest), are overwhelming in favor of re-approving the compensation package and move to Texas.
This indicates that outside of major corporate investors, Elon Musk has a favorable impression with Tesla shareholders – having delivered the value that he initially promised in his performance package.
Institutional Voters
It remains to be seen how the rest of the stock owners – both institutional and other large individual shareholders – will vote. Some major institutional voters have voted in support of the package and the move to Texas, while others have already voted against both. The institutional shareholders account for 53% of the relative shares available to vote with.
How to Vote
Tesla has a page dedicated to how to vote your your Tesla shares. The process differs slightly based on your broker. You can read the directions directly from Tesla.
Result Announcement
We’ll find out all the details on the final outcome of the vote – and its implications and impacts on Tesla and Elon Musk, this Thursday, June 13th.
