Electric vehicle maker Tesla on Wednesday asked its shareholders to again support chief executive Elon Musk's $56 billion compensation package, initially approved in 2018, after a US judge rejected it earlier this year.
Billionaire businessman Mr Musk's pay was rejected by Kathaleen McCormick, of Delaware's Court of Chancery, in January. The court described the board-approved compensation as an “unfathomable sum” that was not fair to shareholders.
Tesla chairwoman Robyn Denholm said in a regulatory filing on Wednesday that the board stands behind the pay package and does not agree with the Delaware court's decision.
She said it was a matter of “fundamental fairness and respect” to Mr Musk.
“We do not think that what the Delaware court said is how corporate law should or does work. So we are coming to you [stakeholders] now so you can help fix this issue,” Ms Denholm added.
In an emotional appeal in the filling, she said: “You have the chance to reinstate your vote and make it count … we are asking you to make your voice heard.”
The company’s annual meeting is scheduled for June 13.
Mr Musk’s package includes no salary or cash bonus, but he is compensated through stock options based on the company’s market value.
Tesla was trading 1.01 per cent down at $155.52 at 7.35pm UAE time on Wednesday, giving it a market value of $487.22 billion. The company's shares have dropped more than 37 per cent since the start of the year.
Industry experts are not bullish about the company’s growth prospects.
Last week, Philippe Houchois, an analyst at capital markets firm Jefferies, reduced his price target for Tesla stock from $185 to $165, while Piper Sandler analyst Alexander Potter adjusted the firm's target down to $205 from $225.
The hefty pay package required Mr Musk to deliver “transformative and unprecedented” growth and Tesla said he has met all targets associated with it.
On June 5, 2018, Richard Tornetta, a stockholder of the company holding nine shares of common stock at the time, in his individual capacity filed a complaint in the Delaware court alleging breaches of “fiduciary duty, unjust enrichment and waste”.
Mr Tornetta alleged, and the Delaware court held, that Mr Musk controlled the board, leading to an unfair process surrounding the formulation and approval of the 2018 performance award.
“The incredible size of the biggest compensation plan ever – an unfathomable sum – seems to have been calibrated to help [Mr] Musk achieve what he believed would make 'a good future for humanity',” wrote Ms McCormick in her 201-page opinion.
Tesla said the January decision in Mr Tornetta's appeal ignored material evidence presented at trial and the court made “errors of fact and incorrect conclusions of law”.
The company additionally announced its intention to seek shareholders' approval for relocating the company's incorporation from Delaware to Texas.
The statement came close on the heels of the carmaker announcing plans to cut its workforce by more than 10 per cent.
Tesla is aiming to reduce its global staff as it faces declining sales and increased competition in the EV market.
This month, it also reported a nearly 8.5 per cent annual drop in its March quarter deliveries.
The fall in deliveries, the first in four years, was caused by various factors, primarily Houthi rebel strikes in the Red Sea, an arson attack at Tesla's German factory and increased production of the updated Model 3.
The company is expected to report its last quarter’s earnings on April 23.
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
The years Ramadan fell in May
EPL's youngest
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- Max Dowman (Arsenal)
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COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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Monster
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The five pillars of Islam
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More from Neighbourhood Watch:
Managing the separation process
- Choose your nursery carefully in the first place
- Relax – and hopefully your child will follow suit
- Inform the staff in advance of your child’s likes and dislikes.
- If you need some extra time to talk to the teachers, make an appointment a few days in advance, rather than attempting to chat on your child’s first day
- The longer you stay, the more upset your child will become. As difficult as it is, walk away. Say a proper goodbye and reassure your child that you will be back
- Be patient. Your child might love it one day and hate it the next
- Stick at it. Don’t give up after the first day or week. It takes time for children to settle into a new routine.And, finally, don’t feel guilty.
The five pillars of Islam
