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Tesla (TSLA) CEO Elon Musk claimed over the weekend that the vast majority of Tesla retail investors who voted ahead of Thursday’s annual shareholder meeting support two key measures, including reapproving his $56 billion severance offer from 2018. TSLA shares fell on Monday.




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Musk posted on X on Saturday that around “90 percent of small shareholders” who have voted so far support the payment of his salary package and the re-establishment of Tesla in Texas. Tesla has been incorporated in Delaware since 2003.

“The public sentiment is clearly supportive,” Musk said on Saturday.

Retail investors currently own about 40% of Tesla shares. Institutional investors own a much larger share of Tesla shares than they did in 2018. Vanguard voted against Musk’s pay package in 2018, while BlackRock and many others supported it.

The Tesla boss wrote on Saturday in response to news that Norway’s sovereign wealth fund, which manages about $1.7 trillion in assets, voted against Musk’s 2018 salary agreement, the latest institutional investor to decide not to support the measure ahead of Thursday’s meeting.

“We appreciate the significant value created under Mr. Musk’s leadership since the grant date in 2018, but remain concerned about the overall level of compensation, the structure given the performance triggers, dilution and the lack of mitigation of key person risk,” Norges Bank Investment Management, the fund’s official name, said in a statement on its website.

Norges Bank Investment Management owns nearly 1% of TSLA shares. The sovereign wealth fund added that its decision was “consistent with our vote on the same award in 2018.”

“We will continue to seek constructive dialogue with Tesla on this and other issues,” the fund added.

Musk responded on Saturday: “That’s not cool.”

Voting before the shareholders’ meeting

Since Tesla asked shareholders on April 17 to ratify Musk’s 2018 pay package, even though a Delaware court voided the plan earlier this year, the electric car giant has been trying to win the votes of its retail investors. Musk’s pay package is currently worth around $45 billion.

The vote comes after a judge in Delaware ruled against the 2018 package, finding it excessive and unfair to Tesla investors. The judge criticized Musk’s “extensive ties” to Tesla board members.

Tesla shareholders will also vote on whether to move Tesla from Delaware to Texas.

The vote on Musk’s compensation requires a simple majority of votes, excluding shares held by Musk and his brother Kimbal Musk. The vote on Tesla’s Texas reorganization requires a majority of all outstanding shares, with any uncast vote counted as a “no.”

The vote has been going on for several weeks. The Tesla board has recommended voting “yes” on both the reintegration in Texas and Musk’s salary.

All Tesla shareholders can vote at Tesla’s annual meeting of shareholders, which closes at 11:59 p.m. Eastern Standard Time on June 12. Registered shareholders can also vote at the virtual annual meeting.

In 2018, Tesla’s board of directors approved Musk’s 2018 pay package with 73% of the vote.

Tesla shares: Elon Musk remains “motivated”

Last week, Tesla CEO Robyn Denholm sent a letter to shareholders imploring investors to give Musk his 2018 salary offer.

“If Tesla wants to keep Elon’s attention and motivate him to continue to invest his time, energy, ambition and vision to achieve comparable results in the future, we must stand by our deal,” Denholm wrote to shareholders on Wednesday.

Denholm added that the deal was “obviously not about the money” as Musk is one of the richest people in the world.

“Motivating someone like Elon requires something different,” she wrote. “This is one of the main reasons why the award also requires Elon to hold any shares he receives upon exercise of the stock options for five years after the options are exercised – which can only motivate him to continue creating value for Tesla and our shareholders.”

Musk and Tesla control

CNBC reported on June 4 that Musk in December NVIDIA (NVDA) is sending AI processors intended for the electric car giant to its social media company X, formerly Twitter, which Musk bought in October 2022.

Musk has indicated throughout the year that he feels he needs more TSLA shares and voting power to make Tesla a “leading company in artificial intelligence and robotics.”

In January, Musk posted on X that he was “uncomfortable building Tesla into a leader in AI and robotics without having about 25% voting control.” The CEO added that he wanted enough shares to be “influential, but not so many that I can’t be overthrown.”

“This is primarily about ensuring the right level of voting power at Tesla,” Musk said. “With a pro/con ratio of 15 percent or less outvoting me, it makes it too easy for interested parties with dubious interests to tie themselves to me.”

Adam Jonas, Morgan Stanley’s renowned auto analyst and Tesla expert, wrote on June 4 that if Musk does not achieve a 25% voting stake in the electric car giant, “Tesla shareholders should prepare for Tesla to significantly slow/limit its direct investments in sensitive/advanced AI efforts.”

“While Tesla may still be able to benefit indirectly from advances in AI, we believe most related AI efforts could be focused on non-Tesla companies controlled by Elon Musk,” Jonas added.

Musk currently owns a nearly 13% stake in Tesla. Before he sold TSLA shares to buy Twitter, now X, for $44 billion in late 2022, Musk owned about 22% of Tesla.

The legal situation

Meanwhile, it is still unclear how the Delaware court might react if the collective agreement is re-approved.

The judge has scheduled a hearing for July 8 to decide whether the lawyers for the Tesla shareholder who filed the lawsuit against Tesla will receive $6 billion worth of TSLA stock as legal fees.

After that hearing, Musk can ask the Delaware Supreme Court to review the case. Unless the decision is overturned on appeal, the 2018 pay package will not be recognized under Delaware law.

This is where Tesla’s move to Texas comes in. If shareholders approve the Texas reorganization, lawsuits will be filed in that state, not Delaware.

However, Tesla shareholders could challenge the electric car giant’s move to Texas. If that happens, the lawsuit would be heard in Delaware courts, according to Bloomberg.

On May 28, the Delaware judge said, according to media reports, that she did not believe Tesla would circumvent her ruling in the case.

Tesla wrote in court documents that an attempt to retry the case in Texas was “wild speculation.”

Performance of Tesla shares

TSLA shares fell 2% to 173.79 during market activity on Monday. Last week, Tesla shares fell 0.3% to 177.48.

TSLA fell 2.8% in May and is down about 30% so far this year.

However, Tesla has rebounded since reporting first-quarter earnings and revenue on April 23, finding support just above its 50-day moving average, according to MarketSurge analysis. On April 22, Tesla stock hit a 52-week low of 138.80.

The electric car giant will announce its second-quarter results in mid-July.

Tesla stock ranks seventh in the 35-member IBD Automakers industry group. The stock has a weak Composite Rating of 42 out of a best possible 99. The shares have a Relative Strength Rating of 17 and an EPS Rating of 62.

Please follow Kit Norton on X @KitNorton for more coverage.

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