Tesla has now disclosed that it is spending money to promote its shareholders vote to approve of Elon Musk’s $55 billion compensation package.
Back in 2018, Tesla shareholders approved one of the biggest compensation plans of all-time: a $55 billion fully stock-based CEO compensation plan for Elon Musk.
In January, a judge sided with lawyers representing a Tesla shareholder alleging that Tesla’s board misrepresented the compensation package when presenting it to shareholders.
It’s a complicated issue, but in short, the judge found that Tesla’s board and Musk didn’t play by the rules of a public company when it presented the plan to shareholders.
The judge found that Tesla had governance issues when coming up with the compensation plan and those issues were not communicated to shareholders before voting on the plan.
Instead, Tesla claimed that the plan was negotiated by “independent board members” when it was found that some board directors had personal financial dealings with Musk outside of Tesla, amongst other things.
The Delaware court found that this invalidated the vote, and therefore, Tesla had to rescind the compensation plan.
Last month, Tesla told shareholders that it will ask them to vote on moving Tesla’s state of incorporation to Texas and then revote for Musk’s compensation plan without changing anything.
Since then, Tesla has been working hard to get shareholders to vote for those two items. It started a website to promote it, sent countless communications to shareholders about it, and now, the company’s board is going a step further.
In a new filing with the SEC, Tesla confirmed that it is now buying ad spaces to encourage shareholders to vote for these items:
Tesla has to file with the SEC all the “communications” it has with shareholders regarding the vote and this time, the communications are listed as “sponsored” on Google – meaning that Tesla bought Google ads for it.
The automaker even spent money on Elon Musk’s pockets by buying ads on X with the post listed as “promoted”.
Tesla shareholders have until June 13th to vote their shares.
Electrek’s Take
Tesla’s board is clearly getting nervous about the vote.
It’s pretty funny that Tesla’s board, which got Elon’s compensation package invalidated after a judge found governance issues, is now approving spending Tesla’s money on an Elon-owned platform to try to influence a vote that would send even more money into Elon’s pockets.
That’s where we are now.