Tesla shareholders back paying Musk billions if stock soars


Tech entrepreneur Elon Musk has flatly denied "Globes" report that his visit to Israel this week is connected to collaboration between his electric vehicle company Tesla and Tel Aviv-based startup Cortica. About 73% of votes were vast in favour of the plan, excluding shares owned by Mr Musk and his brother.

If Musk hits a series of performance targets over the next decade, the carmaker's market cap would rise to $650 billion from roughly $55 billion today.

The vote took place at a special meeting of stockholders on Wednesday.

The vote result indicated some, but not all big investors were prepared to support a large payout at the founder-led company.

Two firms that evaluate proxies for investors recommend that shareholders vote against the pay plan, which they say is unprecedented in size for a US public company.

Moreover, Chanos said, the SolarCity acquisition of which KA was short "was going bankrupt" because "they got the market wrong" and "out of the blue Mush decided Tesla should buy SolarCity for United States dollars 8 billion" although SolarCity "was losing USD 300 million in negative EBIT a year before the debt service and depreciation". ISS said it valued the award even higher, at $3.7 billion.

Tesla says it received "nearly 500,000 applicants" over the a year ago while it had about 2,500 job openings - making it a highly competitive application process.

If Musk were to leave, it would be a huge blow, the company has repeatedly told investors in regulatory filings.

Tesla's stock was up 2.5% ahead of a shareholder vote on Elon Musk's compensation package.

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John Trentacoste, a partner at pay consultant Farient Advisors, said the 73 percent support level shows "there is support, but scepticism" among investors for Musk's pay plan.

In 2017, Tesla's Ebitda stood at $528.5 million and revenue at $11.76 billion, according to Thomson Reuters data.

A statement from CalSTRS' Director of Corporate Governance, Anne Sheehan, read: "Given the size of the award, we believe the potential dilution to shareholders is just too great".

California State Teachers' Retirement System (CalSTRS), one of the nation's largest public pension plans, is the 59th largest investor in the vehicle maker, with a 0.13 percent stake.

The package for Musk, 46, features a 10-year grant of stock options which vest in 12 tranches. "CalSTRS is one of the nation's largest public pension plans but only the 59th largest investor in the auto maker, with a 0.13% stake".

The pay plan helps ensure Musk will remain at Tesla at least until 2028, but several questions loom. With a starting price of $35,000, Tesla is targeting a mass market with the Model 3, but has struggled with mass production so far.

Musk will not receive any salary, cash bonuses, or equity that vests "simply by the passage of time", Tesla's board said in the filing.

"I got my 30-year-old girlfriend Jana pregnant and we had a baby son, who is now ten months old", he was quoted as saying.