Tesla asks shareholders to reapprove huge Musk pay deal

DETROIT

Electric vehicle maker Tesla will ask its shareholders to vote again on a $56 billion compensation package they had approved in 2018 for CEO Elon Musk before it was squashed by a U.S. court earlier this year.

In a filing with federal regulators, Tesla Chair Robyn Denholm said the board of directors stood by the original package and argued that the company's "entrepreneurial spirit" had always been one of "big risks for the chance of big rewards."

Musk's payout, worth as much as $55.8 billion in 2018, was voided in January by a Delaware court, ruling on a complaint by an individual shareholder alleging that Musk had dictated his terms to the board, which was not sufficiently independent from its star CEO.

"Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value," Denholm said.

In a second proposal ahead of the June 13 shareholder meeting, the carmaker asked shareholders to support moving the company's state of incorporation from Delaware to Texas, which "is Tesla's home," Denholm said in the filing.

The proposals come amid a difficult stretch for Tesla, whose shares have fallen 37 percent so far in 2024 compared with a gain of about six percent in the S&P 500 over the same period.

Earlier this week, Tesla announced it would lay off more than 10 percent of its global workforce.

That move comes after Tesla reported a drop in first-quarter auto deliveries in a decline seen as reflective of rising competition among electric vehicle producers and slowing demand growth in some markets.