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Is Elon Musk worth $45 billion to Tesla?


Elon Musk has a chance to collect billions more. Tesla shareholders voted again to approve compensation for him. This vote showed the majority's confidence in the CEO, and at a shareholder meeting, Musk responded.


ELON MUSK: Hot damn, I love you guys.


INSKEEP: This is the second time Tesla investors have voted on Musk's pay package - the same one that a judge threw out earlier this year.


NPR's Camila Domonoske covers the car industry. She's here to break this down for us. Good morning, Camila.


SCHMITZ: So tell us about the pay package at the heart of this vote. How much are we talking about?

DOMONOSKE: You know, it's somewhere in the neighborhood of $50 billion. It's all stock, so the exact value varies, but it's a lot. And if you go back in time to 2018, which is when shareholders first approved this pay package, it was a deal where Musk would get no salary at all, but if Tesla got really, really big - so big, the benchmark that was set, to most people, seemed completely impossible - he would get a mind-boggling amount of stock, and then that's exactly what happened. Tesla grew phenomenally, and he received this huge compensation package that was entirely Tesla stock. And that means not just a phenomenal amount of money. It also means a huge amount of control expanding his influence over this company.

SCHMITZ: Wow, so we've got an eye-popping figure for Mr. Musk, a lot of control. But is there something wrong with that?

DOMONOSKE: So one small shareholder sued, and the judge in Delaware, where Tesla, like a lot of companies, is incorporated for the business-friendly laws - this judge said, yeah, no, this is actually no good. She found that Musk had too much influence over the board when they determined this package - CEOs aren't supposed to set their own pay, basically - and that when shareholders did vote on it, they weren't fully informed. So in response, we've seen two votes here from Tesla. One reconfirmed the pay package, and the other moved the company's incorporation from Delaware to Texas.

SCHMITZ: So, you know, this vote yesterday went very well for Elon Musk. He said, hot damn - thank you very much to his shareholders. Did any investors have doubts about this?

DOMONOSKE: Yes. We saw some big investors, including the California teachers' and public employees' retirement funds, vote no. The logic here was, you know, the obvious - it's just too big. There's also been some concerns from some big investors about whether Elon Musk is paying enough attention to Tesla, which is something you do hear from some small investors, too.

I've been on an EV road trip this week and chatting with people about EVs. And one Tesla shareholder in New Jersey told me that he thought it might be time for Musk to step back so, as he put it, Musk could pay more attention to Twitter - but obviously, that's a minority opinion, right? A lot of individual investors said yes to this pay package. There was actually an organized campaign to get them to come out and vote, which a lot of shareholders, individuals, usually don't do. Each one's a small chunk of the voting power here, but overall, big impact - this is a vote of confidence in Musk that he himself is crucial to Tesla's future.

SCHMITZ: So is that it? Is that the end of the story here?

DOMONOSKE: There's going to be a lot more legal battles.


DOMONOSKE: A lawyer for the team that challenged this pay package called this vote coerced and, quote, "deeply flawed," said it does (ph) make a difference to their case, where this judge said they won. You know, we've been in unprecedented territory for this case for a while now, and I think that's still where we are. We'll have to see where it heads.

SCHMITZ: NPR's Camila Domonoske, thank you.

DOMONOSKE: Thank you. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Rob Schmitz is NPR's international correspondent based in Berlin, where he covers the human stories of a vast region reckoning with its past while it tries to guide the world toward a brighter future. From his base in the heart of Europe, Schmitz has covered Germany's levelheaded management of the COVID-19 pandemic, the rise of right-wing nationalist politics in Poland and creeping Chinese government influence inside the Czech Republic.
Camila Flamiano Domonoske covers cars, energy and the future of mobility for NPR's Business Desk.