Elon Musk takes victory lap after 77% of Tesla shareholders vote in favor of his $56 billion payout

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Tesla revealed on Friday that CEO Elon Musk secured an emphatic victory in a shareholder vote on his $56 billion pay package and a proposal to move the company’s headquarters from Delaware to Texas.

Musk’s stock option package — the largest in U.S. history — was reapproved by 77 percent of the votes cast at Tesla’s annual meeting in Austin on Thursday, according to a regulatory filing. Excluding shares owned by Musk and his brother Kimbal, it was 72 percent.

The reincorporation plan in Texas won the support of 63 percent of the votes cast. The win surprised even those inside the company. Chairwoman Robyn Denholm likened the task to climbing “Mount Everest” during a frantic months-long campaign.

The results are a significant boost for Musk as he seeks to regain control of Tesla. The vote became a referendum on his mercurial leadership, particularly his plans to transform Tesla into an artificial intelligence and robotics company.

The reaffirmation of his pay will also strengthen the company’s hand as it tries to reverse a Delaware court ruling in January to void a 2018 stock option package over concerns about its value and board independence.

Musk chose not to be generous in his victory. Early Friday morning, he posted a photo on X of a cake he said he planned to send to Delaware as a “parting gift.” It was decorated with the inscription “Vox Populi, Vox Dei” in the frosting, which means “the voice of the people is the voice of God”.

While the vote does not replace the court’s decision, ratification could prove instrumental in persuading a judge to change or change his position. Musk’s grip on the company would tighten, raising the CEO’s stake to more than 20 percent from his current 13 percent.

The day before, as the polls in Austin closed at 4 p.m., Musk took the stage to address an excited crowd chanting his name and bouncing in celebration in front of a blue-pink neon sign in the shape of Texas.

“Damn, I love you guys,” he told an audience of carefully selected retail investors. “We have the most amazing shareholder base of any public company. . . We are not just opening a new chapter for Tesla, we are starting a new book.”

The jubilant CEO cracked jokes and remarked during his speech, “what do you know, it’s 4:20 p.m.,” alluding to a 2018 tweet about a $420-a-share takeover of Tesla. Many interpreted the price as a reference to 4/20; April 20th is a day celebrated by marijuana smokers.

Tesla quickly left the state. On Friday, Denholm said in a letter to shareholders that she had already filed for reincorporation in Texas. The chairman added: “The decisive approval by our shareholders confirms our commitment to the company [pay] deal” and “we intend to bring this back to court in Delaware to ensure that your votes . . . are heard”.

The next phase of the saga is a hearing in Delaware early next month, when Judge Kathaleen McCormick will consider a $5.2 billion fee request filed by lawyers who successfully overturned the pay package. After its decision, Tesla can appeal the salary decision to the Delaware Supreme Court.

Greg Varallo, lead counsel for the plaintiffs, said: “We believe that the ratification vote that Elon sought and forced is deeply flawed as a matter of law, legally ineffective and has no impact on our case. We will respond to any arguments raised in a timely manner.”

Key to Tesla’s success in the vote was persuading Vanguard, its largest shareholder with a 7.3 percent stake, to change its stance on pay after opposing it in 2018.

While Vanguard admitted the stake award was a “substantial departure” from any other in the company’s history, it said the “unique circumstance of the plan’s evaluation retroactively eliminated our concerns.”

The 9.3tn asset manager said it changed its position after meeting with Musk and Tesla executives. It concluded that “the strong alignment of executive pay with shareholder returns from 2018 and the benefits the board claimed related to the incentive value to the CEO of maintaining the original deal” were sufficient to justify his move.

BlackRock, the second largest, also supported both resolutions. BlackRock declined to comment.

Additional reporting by Will Schmitt and Patrick Temple-West in New York