Tesla ETF Spikes as Elon Musk Inches Closer to Payday
Elon Musk said that two key shareholder resolutions were close to being decided in his favor.
Tesla ETFs rose but were off their highs on Thursday after Elon Musk suggested that a key shareholder vote was set to be decided in his favor.
Investors were leaning toward a move of "Tesla’s state of incorporation from Delaware to Texas” and “ratifying Elon Musk’s compensation under the CEO pay package that stockholders previously approved at the 2018 special meeting,” according to a post made by Musk on the social media platform X.
Tesla shares were up by 4% about midday Thursday after rising by as much as 7.8%.
The Direxion Daily TSLA Bull 2x Shares (TSLL) was recently up 7.5% after gaining 15.4% at the high of the day.
The news that most investors backed Musk’s $56 billion pay package was viewed positively by those that want him to stay at the helm of the company.
Musk has threatened to leave Tesla if he doesn’t have substantial voting control of the company.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned. Unless that is the case, I would prefer to build products outside of Tesla,” he wrote on X in January.
Seeking Voting Control
If the shareholder resolution that ratifies his 2018 pay package is approved, Musk will be one step closer to having the voting control that he wants.
However, ratification doesn’t guarantee that he will receive the 303 million stock options that he and his supporters believe he earned.
In January, a Delaware judge struck down the pay package because it was deemed unfair and wasn’t negotiated properly by Musk and Tesla’s board of directors.
Musk must now overturn that decision on appeal. The shareholder resolution ratifying the pay package will help him make his case but doesn’t guarantee victory.
