Tesla is asking shareholders to vote another time on Elon Musk's $56 billion pay package after a Delaware judge nullified the biggest compensation plan in corporate America.
In a proxy filing published Wednesday, the electric-car manufacturer also stated it would hold a vote on moving its state of incorporation to Texas from Delaware. Tesla is set to hold its annual shareholders meeting on June 13.
The request comes days after news that Tesla would reduce its headcount by 10% globally, or about 14,000 people. In a letter to stockholders, Tesla cited the need to carefully manage its resources for its decision.
- SpaceX moves incorporation to Texas, as Elon Musk continues to blast Delaware.
In looking to re-ratify Musk's 2018 pay package, Tesla argued that "corporate democracy and stockholder rights" are at stake, telling shareholders the court had "rescinded the pay package that an overwhelming majority of you voted to grant."
A Delaware judge in late January threw out the share-based payout, calling it an "unfathomable sum" and unfair to shareholders. In her ruling, the judge accepted the shareholder lawyers' argument that Musk personally dictated the landmark pay package in sham negotiations with directors who were not independent.
Tesla Investors Hope for Governance Revamp After Ruling
Following a recent ruling, many investors are hopeful that Tesla will make changes to its governance structure. The board has been under scrutiny for not effectively managing its CEO, who has been involved in conflicts with advertisers and regulators.
