Tesla’s (NASDAQ:TSLA) stock jumped as much as 6.4% at 9:35 a.m. in New York after CEO Elon Musk shared preliminary voting results on X, the social media platform he owns. This announcement came just hours before the official end of shareholder voting and ahead of Tesla’s annual meeting on Thursday in Austin. Musk posted two charts indicating that the proposals had received shareholder approval.
Over the past two months, Musk and Tesla’s board have actively campaigned for support, particularly for a pay deal that could grant Musk up to $55.8 billion in stock options if the company achieves certain milestones. Earlier this year, a Delaware judge voided the award due to conflicts of interest among Tesla directors and issues with disclosure.
The vote on Musk’s compensation carries more symbolic significance than legal authority. While shareholder approval may bolster Tesla’s position in any appeal or new case, the company acknowledged in its proxy filing that it “cannot predict with certainty how a vote to ratify Musk’s compensation would be treated under Delaware law.”
“This doesn’t fully settle the matter; the compensation package can still be deemed illegal,” noted Alexander Potter, an analyst at Piper Sandler, in a note to clients. “We expect the stock to respond favorably to this news, though the upside is perhaps unlikely to be as significant as the downside would have been had shareholders rejected the deal.”
Tesla Chair Robyn Denholm engaged with major institutional investors to garner support for the proposals, and the company placed several ads related to the vote on X. In the final days of the campaign, several current and former executives and engineers voiced their support for Musk on the platform.
Supporters of the CEO’s pay package included Scottish asset manager Baillie Gifford & Co., Cathie Wood’s Ark Investment Management LLC, and Ron Baron of Baron Funds. In an open letter, Baron argued that the shareholders’ will from the 2018 vote should be respected, asserting that without Musk, “there would be no Tesla.” He emphasized that this vote could influence Musk’s decision to remain with the company.
Opponents of the proposal included Norway’s sovereign wealth fund, Norges Bank, and the California Public Employees’ Retirement System.
Shareholders also voted on Tesla’s proposal to move its state of incorporation to Texas. The company noted in its proxy filing that the relocation might face legal challenges, including objections under Delaware law.
The shareholder meeting will be livestreamed on Thursday, starting at 4:30 p.m. New York time.
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