"Elon Musk's $1 trillion pay package is now a reality - and Tesla is determined to keep it that way. Shareholders voted to approve the record-breaking compensation plan by a 75% margin on Thursday, paving the way for Musk to become the world's first trillionaire should he meet a series of ambitious product and financial goals. It came after the Tesla CEO's previous $56 billion pay package, which was approved by Tesla shareholders in 2018 and again in 2024, was struck down by a Delaware judge last year following an investor lawsuit."
"Under SB 29, litigants must now prove in a lawsuit that a company's directors are not acting in good faith and that they have engaged in fraud or violated the law. The bill also introduced a new rule that shareholders have to own at least 3% of the company's shares to bring legal action, also known as a derivative lawsuit. The threshold is not automatically applied to companies, but Tesla incorporated it into its bylaws in May."
Shareholders approved Elon Musk's $1 trillion compensation plan by a 75% margin, enabling potential trillionaire status if specified product and financial targets are met. A prior $56 billion package was voided by a Delaware judge after an investor lawsuit. Tesla relocated its legal domicile from Delaware to Texas and incorporated a 3% ownership threshold into its bylaws. Texas enacted SB 29 and SB 1057, requiring plaintiffs to prove directors acted in bad faith or committed fraud to bring derivative suits. Only Musk and a few institutional investors exceed 3% ownership, making coordinated shareholder litigation difficult and costly, with roughly $42 billion needed to meet the threshold.
Read at Business Insider
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