At the annual Tesla shareholders meeting on Thursday in Austin, Texas, a final vote will be held on a controversial proposal that asks shareholders to «approve 100% performance-based stock options granted to Elon Musk» in 2018.
Even if investors approve this measure, the final word will be with the court.
The proposal, one of ten to be considered by shareholders, made it to the ballot due to a Delaware court in January ruling to cancel the compensation package for Tesla’s CEO. The package included performance-based stock options previously valued at about $56 billion.
Judge Catalin MacCormick found that Tesla’s board members lacked independence from Musk, didn’t properly interact with the CEO, and didn’t fully inform shareholders before asking them to vote on his 2018 pay plan.
Anne Lipton, a corporate and securities attorney currently teaching at Tulane Law School, told CNBC in a letter that shareholders won’t be able to undo the court’s decision.
«Some people seem to (incorrectly) think that voting to support will resolve legal disputes,» Lipton said. «It won’t. It will complicate them.»
Voting to reinstate the pay plan would be a global victory for Musk, who has faced a number of significant challenges at and beyond Tesla.
The electric vehicle manufacturer is mired in a sales slump due to an aging product lineup, increased competition, especially in China, and brand depreciation, which a recent survey partially links to Musk’s «distractions» and «political statements.»
