COMP NEWS – Tesla Shareholders have approved an earth-shattering $46 billion pay package for controversial CEO Elon Musk.
In the history of U.S. corporate pay packages, there have been plenty of massive payouts worth almost $1 billion in today’s dollars. But none comes close to the $46 billion pay deal Tesla shareholders on Thursday handed to CEO Elon Musk.
The results of the shareholder vote, which concluded today, were announced during Tesla’s annual meeting, prompting a standing ovation from shareholders attending the Thursday event at Tesla’s headquarters in Austin, Texas. Musk had already declared victory, writing late Wednesday on his social media platform X that shareholders were voting to approve the pay package by “wide margins.”
“Hot damn, I love you guys,” an exultant Musk said at the shareholder meeting after the vote results were announced. He also capitalized on the occasion to tout Tesla’s success in selling electric vehicles and what that means for the fight against climate change.
“It’s incredible. I think we’re not just opening a new chapter for Tesla, we’re starting a new book,” he said, adding, “We’re starting to make a real noticeable dent in carbon emissions.”
Tesla said in a Friday regulatory filing that 72% of voting shares supported Musk’s pay package, excluding shares voted by himself and his brother, Kimbal Musk, who serves on Tesla’s board.
Opponents of Musk’s compensation point out that generous CEO pay packages don’t correlate with better performance – in fact, the opposite is shown to be true based on some analyses.
The underlying question of the debate over Musk’s payout is whether such grandiose packages actually make a difference in CEO performance. In other words, do CEOs actually outperform when they are given larger-than-normal packages? And if they don’t receive such jaw-dropping deals, do they underperform?
Generous CEO pay packages don’t actually guarantee better results, according to a 2017 study from investment research firm MSCI. In fact, the analysis found that the companies with the smallest equity incentive awards outperformed those with the heftiest packages by almost 39% on average over a 10-year period.
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