Tesla shareholders approve Elon Musk's $2.6-billion performance award

Tesla shareholders approve Elon Musk's $2.6-billion performance award

Tesla shareholders approve Elon Musk's $2.6-billion performance award

Tesla Inc shareholders approved a compensation package potentially worth as much as $2.6 billion for Chief Executive Elon Musk on Wednesday in a test of their confidence in the leader of the electric vehicle company.

Tesla will have to increase revenue from $20 billion and eventually hit $175 billion, with adjusted earnings increasing over time from $1.5 billion to $14 billion.

Musk, whose fortune Forbes now estimates at $20bn, will have his compensation tied entirely to Tesla's success. The board needs support from investors holding a majority of the shares-not counting those owned by Musk and his brother Kimbal, who's a Tesla director-to make the award. Earlier this month, proxy advisor companies Institutional Shareholder Services Inc. and Glass Lewis & Co. issued a statement encouraging shareholders to deny Musk the 10-year compensation plan.

According to the new compensation plan, Tesla estimates the value of the stock awards to be $2.6 billion, using accounting methods for estimating the cash value of stock options. Plus the company's solar roofs will have to be successfully integrated into its energy storage business. The company now is trying to raise production to meet the demand of its Model 3, a mass-market electric vehicle that starts at $35,000.

In 2016, Musk said he was working so hard, he kept a sleeping bag in a conference room adjacent to Tesla's production line in Fremont. "We always hit our goals eventually". "If you wanted to power the entire U.S. with solar panels", he said, "it would take a fairly small corner of Nevada or Texas or Utah; you only need about 100 miles by 100 miles of solar panels to power the entire United States". Additionally, a series of executive exits in the past year has left Tesla without a clear No. 2 - a potential concern even if Musk stays front and center. He also runs the private space firm SpaceX.

'American Idol' Contestant Awkwardly Brings Up Taylor Swift to Katy Perry
When I'm not scrolling through various timeline's I'm researching skin care regiments and watching the Cleveland Cavaliers. While some couldn't help but laugh at the moment, calling it "awkward" , others were left "screaming" over the interaction.

ISS, in recommending against the plan, wrote that Musk could get a substantial portion of the award even if Tesla doesn't reach sustained profitability.

Ahead of the meeting, one of Tesla's biggest shareholders told Reuters the pay plan was "well aligned with shareholders' long-term interests".

Young companies like Tesla usually experience incredible growth over short periods, then level off for a period as they regroup, said Todd Saxton, associate professor of strategy and entrepreneurship at Indiana University. But he doesn't think Musk will do that.

Tesla's other investors, however, such as Baillie Gifford & Co. and T. Rowe Price Group Inc., which command a combined 14% of Tesla's shares, have publicly expressed their support for Musk's new performance award prior to Wednesday's vote.

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