Tesla has made its next move to cement a historical billion-dollar pay package for its controversial CEO – this time, through advertising.
A New Attitude to Ads
In an unusual step for the world’s biggest EV company, Tesla has paid for the kind of advertisements and sponsored content that it famously turned up its nose at in the past.
A Different Approach
But unlike a typical ad campaign for a major company, these ads are not being pushed to sell the company’s newest Model 3, or even its beleaguered but highly publicized Cybertruck. Instead, they have been launched to help Musk obtain a $52 billion payday.
Musk’s Big Payday
At Musk’s behest, the company has spent several years pushing for Tesla shareholders to approve a $55 billion compensation plan for their CEO, making it one of the biggest compensation packages in history.
First Vote in 2018
The first vote for the package was held and approved in 2018. It was set to go ahead until shareholders filed a complaint against the company in court in Delaware.
Judge Rules Against Tesla
In January of this year, the judge on the case ruled in favor of shareholders. He voided the compensation on the grounds that the plan had been secured unfairly by Musk via misleading shareholders.
A Second Vote
Then just last month Tesla announced that they would be asking all shareholders to vote on the compensation package again while making no discernible changes to the plan since it was introduced in 2018.
Move to Texas
The vote will also include the decision of whether or not to move Tesla’s state of incorporation to Texas.
Ads Promoting Pay Package
Now, Musk and the company have made the next move to try and secure his biggest payday yet, by paying for adverts that will encourage shareholders to vote in favor of the package.
SEC Filing
An SEC filing made on Monday shows that Tesla had paid for advertising that directly promoted the upcoming vote in a bid to convince shareholders.
“The Final Say”
Relevant posts bear slogans and captions such as “Vote FOR Tesla Proposal 3 and 4,” “Protect Your Rights and Investments,” and “Stockholders deserve to have the final say.”
2018 CEO Performance Award
Proposal 4 refers to the “ratification of the 2018 CEO Performance Award,” which is the compensation package that could grant Musk the option to buy 304 million shares (worth over $50 billion) at a heavily discounted price.
“Critical to Tesla’s Future”
A letter to shareholders, which was also included in the SEC filing, described the proposal as “critical to Tesla’s future” and also impressed the “Wisdom” of voting to approve it.
The Wisdom of Collective Judgement
“You voted to approve the 2018 CEO Performance Award six years ago and time has shown the wisdom of your collective judgment,” the shareholder letter read.
Bold Move from Tesla
It’s a bold and surprising move for Tesla, who have been famously reticent to spend money on advertising for Tesla vehicles and other products.
“I Trust the People”
“Other companies spend money on advertising & manipulating public opinion,” Musk shared on X back in 2021. “Tesla focuses on the product. I trust the people.”
Questions for Musk
But whether the people trust Musk is another question. Some have questioned the decision to push advertising toward shareholders instead of prioritizing potential customers, despite the company’s plunging profits in the first quarter of this year, as well as layoff announcements and product recalls.
Pay Over Product?
It’s also a shock to many that a CEO would push so hard for the largest pay package in history when the same company is so frugal about things like advertising, which are seen as a practical necessity for major corporations.
Voting Ends in June
Shareholders have until June to make a decision and cast their vote. As of yet, it is unclear how many will vote for or against the board’s recommendations, as the online sphere has heard opinions from both sides.
Tesla Remains Steadfast
Still, Tesla (with Musk at the wheel) has remained steadfast that the astronomical pay package is imperative to push the EV company in the right direction.
Asking Once Again
“We don’t believe one judge’s opinion should void the will of millions of votes cast by all of the owners of the company,” the company said in a video addressing investors. “So once again, we’re asking you to make your voices heard by voting for the ratification of the 2018 performance award.”
The post – Tesla Campaigns for Shareholder Approval of Musk’s $52B Pay – first appeared on Wealthy Living.
Featured Image Credit: Shutterstock / Nadezda Murmakova.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
