Tesla boss Elon Musk let Delaware know it can eat cake as the company reportedly put in paperwork to shift its incorporation from the First State to the Lone Star State.
Nearly 90% of shareholders on Thursday voted in favor of the move, leading Musk to quip on his social media site X that he was sending a cake to Delaware “as a parting gift.”
The post included an image of a vanilla-frosted sheet cake with the words “Vox Populi, Vox Dei” – Latin for “the voice of the people is the voice of God” – written in red letters, along with a big heart.
Musk initiated the move from Delaware to Texas in January after Delaware judge Kathaleen McCormick struck down his $56 billion pay package that was approved in 2018, calling the massive compensation “an unfathomable sum.”
In a separate vote Thursday, nearly three-quarters of shareholders – excluding Musk and his brother, Kimbal Musk – gave the green light to the largest-ever corporate pay package, overcoming opposition from a number of institutional investors and proxy advisory firms.
The decisive vote confirms the company’s commitment to the 2018 deal, Tesla board chair Robyn Denholm said in a letter to shareholders on Friday.
“We intend to put it back in front of the court in Delaware to ensure that your voices as owners of our company are heard,” she wrote.
Vanguard, Tesla’s largest shareholder after CEO Musk, voted in favor and played a major role in passing the pay deal after first disapproving it in 2018, a note seen by Reuters showed.
The approval, however, did not resolve the lawsuit. Legal experts were split as to whether it would hold sway in the case, which could stretch out for months.
Some suggested that the original case’s arguments that Tesla’s shareholders were not fully aware of how quickly Musk would achieve the 2018 goals was no longer relevant.
“Now that shareholders have voted for it a second time with all of the facts out in the open, the entire crux of the judge’s argument becomes invalid,” said Natela Shenon, a partner at Grant Shenon in Los Angeles, on Thursday evening.
Some large investors argued that the package will hurt existing shareholders and that the board still lacks independence.
“Instead of continuing to try to defend it in court, the board should hire a compensation consultant, and renegotiate Musk’s incentive plan so that it is appropriate and not dilutive to shareholders,” said New York City Comptroller Brad Lander, who oversees the city’s public retirement funds.
Investors hope the win will help Musk focus his attention more on Tesla, whose shares have slumped as sales of electric vehicles slowed and Musk purchased social media platform Twitter, later renamed X. Tesla shares fell more than 2% on Friday.
