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Elon Musk wins back his $44.9 billion Tesla pay package in shareholder vote

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Elon Musk wins back his $44.9 billion Tesla pay package in shareholder vote
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News

Elon Musk wins back his $44.9 billion Tesla pay package in shareholder vote

2024-06-14 18:53 Last Updated At:19:00

DETROIT (AP) — Tesla shareholders voted Thursday to restore CEO Elon Musk's record $44.9 billion pay package that was thrown out by a Delaware judge earlier this year, sending a strong vote of confidence in his leadership of the electric vehicle maker.

The favorable vote doesn’t necessarily mean that Musk will get the all-stock compensation anytime soon. The package is likely to remain tied up in the Delaware Chancery Court and Supreme Court for months as Tesla tries to overturn the Delaware judge's rejection.

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Work continues on the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

DETROIT (AP) — Tesla shareholders voted Thursday to restore CEO Elon Musk's record $44.9 billion pay package that was thrown out by a Delaware judge earlier this year, sending a strong vote of confidence in his leadership of the electric vehicle maker.

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Tesla's Gigafactory is seen, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Tesla's Gigafactory is seen, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Men wearing Texas flag themed western shirts stand next to a Tesla Cybertruck at the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Men wearing Texas flag themed western shirts stand next to a Tesla Cybertruck at the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

FILE - Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit in Gruenheide near Berlin, Germany, March 13, 2024. If Tesla shareholders vote against restoring Elon Musk's $44.9 billion pay package that was tossed out by a Delaware judge, the CEO could deliver on threats to take artificial intelligence research to another firm, or even leave Tesla. (AP Photo/Ebrahim Noroozi, File)

FILE - Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit in Gruenheide near Berlin, Germany, March 13, 2024. If Tesla shareholders vote against restoring Elon Musk's $44.9 billion pay package that was tossed out by a Delaware judge, the CEO could deliver on threats to take artificial intelligence research to another firm, or even leave Tesla. (AP Photo/Ebrahim Noroozi, File)

Musk has raised doubts about his future with Tesla this year, writing on X, the social media platform he owns, that he wanted a 25% stake in the company in order to stop him from taking artificial intelligence development elsewhere. The higher stake is needed to control the use of AI, he has said.

Tesla also has struggled with falling sales and profit margins as demand for electric vehicles slows worldwide.

But at the company's annual meeting Thursday in Austin, Texas, Musk reassured shareholders that he will stick around, telling them he can't sell any stock in the compensation package for five years.

“It's not actually cash, and I can't cut and run, nor would I want to,” he said.

Vote totals on Musk's pay weren't immediately announced, but the company said shareholders voted for Musk's compensation plan, which initially was approved by the board and stockholders six years ago.

Tesla last valued the package at $44.9 billion in an April regulatory filing. It was once as much as $56 billion but has declined in value in tandem with Tesla's stock, which has dropped about 25% so far this year.

Chancellor Kathaleen St. Jude McCormick ruled in January in a shareholder’s lawsuit that Musk essentially controlled the Tesla board when it ratified the package in 2018, and that it failed to fully inform shareholders who approved it the same year.

Tesla has said it would appeal, but asked shareholders to reapprove the package at Thursday’s annual meeting.

A separate vote approved moving the company’s legal home to Texas to avoid the courts in Delaware, where Tesla is registered as a corporation.

“Its incredible," a jubilant Musk told the crowd gathered at Tesla's headquarters and large factory in Austin, Texas. “I think we’re not just opening a new chapter for Tesla, we’re starting a new book.”

Musk and Tesla didn’t win everything. Shareholders approved measures that trimmed board member terms from three years to one and cut the required vote on shareholder proposals to a simple majority.

Legal experts say the issue of Musk’s pay will still be decided in Delaware, largely because Musk’s lawyers have assured McCormick they won’t try to move the case to Texas.

But they differ on whether the new ratification of the pay package will make it easier for Tesla to get it approved.

Charles Elson, a retired professor and founder of the corporate governance center at the University of Delaware, said he doesn’t think the vote will influence McCormick, who issued a decision based on the law.

McCormick’s ruling essentially made the 2018 compensation package a gift to Musk, Elson said, and that would need unanimous shareholder approval, an impossible threshold. The vote, he said, is interesting from a public perception standpoint, but “in my view it does not affect the ruling.”

John Lawrence, a Dallas-based lawyer with Baker Botts who defends corporations against shareholder lawsuits, agreed the vote doesn’t end the legal dispute and automatically give Musk the stock options. But he says it gives Tesla a strong argument to get the ruling overturned.

He expects Musk and Tesla to argue that shareholders were fully informed before the latest votes, so McCormick should reverse her decision. But the plaintiff in the lawsuit will argue that the vote has no impact and isn’t legally binding, Lawrence said.

The vote, he said, was done under Delaware law and should be considered by the judge.

“This shareholder vote is a strong signal that you now have an absolutely well-informed body of shareholders,” he said. “The judge in Delaware still could decide that this doesn’t change a thing about her prior ruling and doesn’t require her to make any different ruling going forward. But I think it definitely gives Tesla and Musk strong ammunition to try to get her to revisit this.”

If the ruling stands, then Musk likely will appeal to the Delaware Supreme Court, Lawrence said.

Multiple institutional investors have come out against Musk’s sizeable payout, some citing the company’s recent struggles. But analysts said votes by individual shareholders likely put Musk’s pay over the top.

Early Friday, Tesla disclosed that shareholders voted for Musk's pay package by 1,760,780,650 to 528,908,419, with about 77% of all votes in favor. The company's shares jumped 3% by the time the markets closed Thursday and were up 1.2% in pre-market trading early Friday.

After the votes were announced, Musk began telling shareholders about new developments in the company's “Full Self-Driving” system. He has staked the company's future on development of autonomous vehicles, robots and artificial intelligence.

“Full Self-Driving” keeps improving with new versions, and its safety per mile is better than human drivers, Musk said.

"This is actually going to work. This is going to happen. Mark my words, this is just a matter of time,” he said.

Despite its name, “Full Self-Driving” can’t drive itself, and the company says human drivers must be ready to intervene at all times. Tesla’s “Full Self-Driving” hardware went on sale late in 2015, and Musk has used the name ever since as the company gathered data to teach its computers how to drive.

In 2019, Musk promised a fleet of autonomous robotaxis by 2020, and he said in early 2022 that the cars would be autonomous that year. In April of last year, Musk said the system should be ready in 2023.

Since 2021, Tesla has been beta-testing “Full Self-Driving” using volunteer owners. U.S. safety regulators last year made Tesla recall the software after finding that the system misbehaved around intersections and could violate traffic laws.

Musk also said the company is making huge progress on its Optimus humanoid robot. Currently it has two working at its factory in Fremont, California, that take battery cells off a production line and put them in shipping containers, he said.

Despite laying off the team working on Tesla’s Supercharger electric vehicle charging network, Musk said he thinks the company will deploy more chargers this year “that are actually working” than the rest of the industry. In the second half of the year, he expects to spend $500 million on Superchargers, Musk said.

Hamilton reported from San Francisco.

Work continues on the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Work continues on the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Vehicles pass the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Tesla's Gigafactory is seen, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Tesla's Gigafactory is seen, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge. (AP Photo/Eric Gay)

Men wearing Texas flag themed western shirts stand next to a Tesla Cybertruck at the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Men wearing Texas flag themed western shirts stand next to a Tesla Cybertruck at the Tesla Gigafactory, Thursday, June 13, 2024, in Austin, Texas. Tesla shareholders are charting the future of the electric vehicle company as they wrap up voting whether or not to restore CEO Elon Musk's massive pay package that was thrown out by a Delaware judge.(AP Photo/Eric Gay)

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

Future of Elon Musk and Tesla are on the line as shareholders vote on massive pay package

FILE - Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit in Gruenheide near Berlin, Germany, March 13, 2024. If Tesla shareholders vote against restoring Elon Musk's $44.9 billion pay package that was tossed out by a Delaware judge, the CEO could deliver on threats to take artificial intelligence research to another firm, or even leave Tesla. (AP Photo/Ebrahim Noroozi, File)

FILE - Tesla CEO Elon Musk leaves the Tesla Gigafactory for electric cars after a visit in Gruenheide near Berlin, Germany, March 13, 2024. If Tesla shareholders vote against restoring Elon Musk's $44.9 billion pay package that was tossed out by a Delaware judge, the CEO could deliver on threats to take artificial intelligence research to another firm, or even leave Tesla. (AP Photo/Ebrahim Noroozi, File)

TORONTO (AP) — Mark Canha and Wenceel Pérez hit two-run homers, Jack Flaherty struck out eight in 5 2/3 innings to win for the sixth time in seven starts and the Detroit Tigers beat the Toronto Blue Jays 5-4 on Friday night for their third straight victory and ninth in 11.

All-Star first baseman Vladimir Guerrero Jr. and outfielder George Springer had two-run homers for Toronto. The Blue Jays lost for the third time in four games. They’re 12-18 in one-run outcomes.

Blue Jays shortstop Bo Bichette left after six innings because of a strained right calf.

The two-time All-Star and two-time AL hits leader lined out to right field to end the sixth and was injured running to first base, hopping down the line in pain.

“He’s going to get an MRI tomorrow and go from there,” manager John Schneider said. “It sucks for him and for us.”

Leo Jiménez replaced Bichette in the top of the seventh.

Flaherty retired the first 13 batters in order before Bichette singled in the fifth. Daulton Varsho followed with a bloop hit but Flaherty struck out Alejandro Kirk and Ernie Clement.

Flaherty (7-5) allowed two runs and three hits. He’s 6-1 since a May 23 home loss to Toronto.

“It’s hard to argue it’s not a great outing given all the swings and misses he got,” Tigers manager A.J. Hinch said. “Five-plus scoreless before the last swing of his outing. We’ll take that every time and feel good about it.”

Guerrero chased Flaherty with a 445-foot drive in the sixth that had an exit velocity of 117.5 mph. The homer was Guerrero’s 15th.

Flaherty is 3-1 with a 2.35 ERA in four career starts against Toronto.

“It seems like every time out he’s capable of that,” Canha said. “He’s been the rock for us. He’s one of those guys where you’re like. ‘Man, where would we be without him?’”

Tigers right-hander Will Vest got one out in the sixth, and Andrew Chafin worked the seventh.

Springer made it 5-4 with a homer off right-hander Beau Brieske in the eighth, his 11th. Jason Foley replaced Briekse and stranded the tying run at second base.

Left-hander Tyler Holton pitched a 1-2-3 ninth for his third save in three chances.

“We got the outs when we needed them,” Hinch said.

Detroit’s Matt Vierling doubled to begin the fourth and scored on Riley Greene’s single. Canha followed with a home run off right-hander and former Oakland teammate Chris Bassitt (8-8), his seventh.

Canha said Bassitt had a question for him the next time he came to the plate.

“He said something like ‘How’d you hit that pitch?’ really loud,” Canha said. “I just chuckled. He’s a great pitcher. I’m just happy to get my old buddy, get him once.”

Canha’s homer was his first since a May 11 win against Houston.

“You have those droughts every once in a while,” Canha said. “It’s nice to finally get one.”

Cahna left last Saturday’s win over the Dodgers because of a sore right wrist and didn’t play Sunday’ in the final game before the All-Star break.

Pérez chased Bassitt with a two-out drive in the seventh. The homer was Pérez’s sixth.

“He just caught the bottom of the ball and the ball flew,” Hinch said.

Bassitt allowed five runs and seven hits.

ROSTER MOVES

Blue Jays: Toronto activated RHP Yimi García (elbow) off the 15-day injured list and recalled RHP Erik Swanson from Triple-A Buffalo. RHP Zach Pop was optioned to Triple-A.

TRAINER’S ROOM

Tigers: INF Javier Báez (lower back) is expected to return to the lineup Saturday, Hinch said. Báez left last Saturday’s win over the Dodgers, his sixth game after being on the injured list for a month.

Blue Jays: Former NL MVP Joey Votto was scratched from a scheduled rehab game with Triple-A Buffalo after reinjuring his right ankle during pregame warmups. … Bichette returned from the injured list June 24 after missing nine games because of a sore right calf. He left a July 10 game at San Francisco because of calf soreness and sat out the final four games before the All-Star break.

UP NEXT

Blue Jays LHP Yusei Kikuchi (4-8, 4.42 ERA) was scheduled to start against Tigers RHP Reese Olson (4-8, 3.30) on Saturday.

AP MLB: https://apnews.com/hub/mlb

Detroit Tigers catcher Carson Kelly asks for a replacement PitchCom device after his stopped in first-inning baseball game action against the Toronto Blue Jays in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Detroit Tigers catcher Carson Kelly asks for a replacement PitchCom device after his stopped in first-inning baseball game action against the Toronto Blue Jays in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays starting pitcher Chris Bassitt throws to a Detroit Tigers batter in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays starting pitcher Chris Bassitt throws to a Detroit Tigers batter in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Detroit Tigers shortstop Zach McKinstry throws to first base to put out Toronto Blue Jays' Bo Bichette in second-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Detroit Tigers shortstop Zach McKinstry throws to first base to put out Toronto Blue Jays' Bo Bichette in second-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays first baseman Spencer Horwitz throws to first base to put out Detroit Tigers' Riley Greene in second-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays first baseman Spencer Horwitz throws to first base to put out Detroit Tigers' Riley Greene in second-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays starting pitcher Chris Bassitt, center bottom, warms up in the bullpen before taking on the Detroit Tigers in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays starting pitcher Chris Bassitt, center bottom, warms up in the bullpen before taking on the Detroit Tigers in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays' Vladimir Guerrero Jr., left, throws his bat toward his team's dugout after hitting a two-run home run, also scoring Spencer Horwitz, during first-inning baseball game action against the Detroit Tigers in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays' Vladimir Guerrero Jr., left, throws his bat toward his team's dugout after hitting a two-run home run, also scoring Spencer Horwitz, during first-inning baseball game action against the Detroit Tigers in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays' Vladimir Guerrero Jr. hits a two-run home run, also scoring Spencer Horwitz, during sixth-inning baseball game action against the Detroit Tigers in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays' Vladimir Guerrero Jr. hits a two-run home run, also scoring Spencer Horwitz, during sixth-inning baseball game action against the Detroit Tigers in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays' Vladimir Guerrero Jr. (27) throws his bat toward his team's dugout after hitting a two-run home run, also scoring Spencer Horwitz, during sixth-inning baseball game action against the Detroit Tigers in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Toronto Blue Jays' Vladimir Guerrero Jr. (27) throws his bat toward his team's dugout after hitting a two-run home run, also scoring Spencer Horwitz, during sixth-inning baseball game action against the Detroit Tigers in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Detroit Tigers starting pitcher Jack Flaherty throws to a Toronto Blue Jays batter in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Detroit Tigers starting pitcher Jack Flaherty throws to a Toronto Blue Jays batter in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Detroit Tigers starting pitcher Jack Flaherty throws to a Toronto Blue Jays batter in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

Detroit Tigers starting pitcher Jack Flaherty throws to a Toronto Blue Jays batter in first-inning baseball game action in Toronto, Friday, July 19, 2024. (Jon Blacker/The Canadian Press via AP)

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