Tesla Relies on Small Shareholders to Support Elon Musk's $56 Billion Pay Package

By Jace Dela Cruz

Jun 11, 2024 01:36 AM EDT

Tesla is looking to its small shareholder base to back Elon Musk's $56 billion pay package as major shareholders remain divided.

Milken Institute's Global Conference Held In Beverly Hills — BEVERLY HILLS, CALIFORNIA - MAY 6: Elon Musk, co-founder of Tesla and SpaceX and owner of X Holdings Corp., speaks at the Milken Institute's Global Conference at the Beverly Hilton Hotel,on May 6, 2024 in Beverly Hills, California.
(Photo : Apu Gomes/Getty Images)

Tesla Turns to Small Shareholders to Support Elon Musk's Pay Package

According to Reuters, experts said retail investors, who form a substantial part of Tesla's ownership, typically support management but often abstain from voting.

Following a Delaware court ruling against the pay package, the June 13 annual meeting will act as a referendum on Elon Musk's leadership. Tesla has urged investors to reaffirm the package, potentially giving Musk control of over 20% of the company.

Tesla plans to shift its incorporation from Delaware to Texas and re-elect two directors, including the Tesla CEO's brother, Kimbal Musk. While the agenda includes various matters, the primary focus is on the pay package vote and the relocation to Texas.

Reactions From Tesla Large Investors

To engage small shareholders, Tesla has launched a dedicated website, collaborated with online influencers, and offered factory tours to select voters. Reactions from large investors are mixed.

T. Rowe Price Group, Inc. backs the pay package, citing strong alignment with investor interests. In contrast, the California Public Employees' Retirement System and Norway's sovereign wealth fund oppose it, arguing it does not reflect Tesla's performance.