Tesla shareholders will vote on whether Elon Musk will receive a payment of NOK 477.5 billion – NRK Urix – Foreign news and documentaries

Tesla shareholders will vote on whether Elon Musk will receive a payment of NOK 477.5 billion – NRK Urix – Foreign news and documentaries

At 23.10 on Thursday evening, shareholders apparently agreed to pay Musk 477 billion Norwegian kroner.

It is one of the issues that Tesla shareholders voted on during the company's general meeting. Legal relocation from Delaware to Texas was also approved.

The Norwegian Oil Fund had already announced that it would vote to reject the payment, because it believed the package was disproportionately large.

Elon Musk in a test tunnel at The Boring Company in Hawthorn south of Los Angeles in December 2018. Musk wears a checked shirt over a dark shirt and pants.  He holds a microphone and stands in front of a tunnel of blue light.

Elon Musk in a test tunnel at The Boring Company in Hawthorne, south of Los Angeles, in December 2018

Photograph: Robin Beck/AFP/NTP

The case was also brought before the judiciary in the United States of America once. There will likely be several rounds.

But what is the real purpose of this case – and all this money -?

Lawsuit and trial

It all started in 2018. Then the general meeting at Tesla approved a salary package for the founder.

Reuters The package was described as follows: Musk was to receive shares worth about one percent of Tesla's stock each time he achieved one of several goals set by the company.

Contributor Richard Tornetta didn't like it. He thought it was unfair for Musk to get that kind of money.

Therefore, he filed a lawsuit against Musk and several other managers at Tesla.

File photo: Tesla Inc CEO Elon Musk attends the opening ceremony of the Chinese-made Tesla Model Y program in Shanghai

Tesla has made Elon Musk rich and famous. Here he is during the Tesla Model Y launch in Shanghai in 2020.

Photography: Ali Song – Reuters

For a while, the supposed value of the package was about 56 billion US dollars, or 594 billion Norwegian kroner, according to the news agency.

The package is now worth “only” $45 billion, or about 477 billion Norwegian kroner, according to Reuters. The New York Times.

Tesla's general meeting approved the package. However, Musk did not receive any money, because the case is still pending in the courts of the state of Delaware, USA.

Elon Musk signed on to court in Delaware in November 2022.

Elon Musk signed on to court in Delaware in November 2022.

Photograph: Elizabeth Williams/AFP/NTP

And there the judge put his foot down.

Judge Kathleen McCormick declared the pay package invalid. It believed the amount was “unfathomable” and unfair to shareholders.

I also thought Musk had largely set the terms of the package himself, because the board consisted of, among other things, his brother and close friends. The New York Times.

Another try

But the battle is not over yet, because the ruling is still in place.

Now the General Assembly has also voted on the proposal again. This time it was expected to be very crowded.

Check out the feature on Tesla's public meeting at Kveldsnytt-sendiga here:

Two women were found dead in Foros in Stavanger.

Several shareholders have made their position known, including the oil fund. They voted against, which they did in 2018.

Storebrand has also decided to do so, says portfolio manager Ivar Harstveit at the Delphi Fund.

– He says there should be a limit to how comprehensive salary packages can be, but he also stresses He believes it is right to pay key employees for their efforts.

He described the amount as unusually high, even for the United States.

The salary level of top managers in the United States is already much higher than that of Norwegian top managers. That number is rapidly multiplying 100 times again, so we're talking huge sums, Harstveit says.

– Must be examined by the Ethics Committee

Professor of Financial Economics, Björn Espen Ekbo, strongly disagrees with the Oil Fund's announcement that they will vote no.

Björn Espen Ekpo gave an interview to NRK on Thursday.

Bjørn Espen Ekbo is Professor of Financial Economics at Dartmouth College (USA) and Second Professor in the Department of Finance at the Norwegian School of Economics.

Photography: Lokman Ghorbani/NRK

– Then they do not follow through on the contract they themselves helped to conclude. As a shareholder, you, along with all other shareholders, are responsible for footing the bill. Then, when you're clearly giving birth, you shouldn't try not to push, he tells NRK.

Ekpo believes that rejecting the oil fund is unethical.

– I believe that the moral basis of this decision is so bad that it should be investigated by the Ethics Committee of Parliament, which is charged with evaluating the ethics of the behavior of the oil fund, says the professor.

The fund has spent years building a good reputation. With the stroke of a pen, you can actually destroy such a reputation, he adds.

It is not unreasonable

The professor does not think it is unreasonable for Musk to receive the $45 billion package.

– It's a lot of money, but value creation is what you should focus on. He created an enormous amount of money. Thus, he received a total of five percent of that added value. He adds that five percent is not an abnormal percentage in itself, but the numbers are very dangerous.

A photo of Elon Musk at a technology conference in Paris last June.  We see Musk's image from the chest up.  The background is quite dark, he has a blue braid and keeps his hands folded in front of his chest.

Elon Musk at a technology conference in Paris last June.

Photograph: Gonzalo Fuentes/Reuters/NTB

Ekpo points out that when the agreement was concluded, the return requirement was almost impossible to achieve. If Musk had not succeeded, the deal would have been worthless.

-No one thought he would succeed. He still takes the job and manages it in buckets and buckets. He stressed that one of the most important principles in corporate governance is to pay for what you put into it.

– I would say it was good for shareholders to repeat the vote they took in 2018, says Ekpo about the result.

– An unreasonably large salary package

In a report CBS The salary package could reportedly cause Tesla shares to become less valuable.

Harstveit believes there is still no clear answer as to what this will mean for shareholders.

-If Elon Musk does a good job as CEO, meaning he gets an increase in profits at Tesla so that the stock price goes up, that will be good for shareholders. At the same time, he says this does not mean that it is right to receive an unreasonably large salary package.

Musk had previously more or less confirmed that he would get support from the public meeting. Write it down CBS.

– It is expected that both resolutions will be passed by a good margin! He wrote on x/twitter Wednesday evening.

06/13/2024 at 22.03

06/13/2024 at 23.55

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Hanisi Anenih

Hanisi Anenih

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