What Elon Musk’s Convincing Win Means for Tesla

Elon Musk, Tesla’s C.E.O., won major backing from the electric car company’s shareholders.Credit…Frederic J. Brown/Agence France-Presse — Getty Images

“Starting a new book”

Elon Musk got his way.

Shareholders in Tesla voted in favor of his two big asks, reaffirming a multibillion-dollar compensation package that a Delaware judge had nullified and approving the company’s reincorporation in Texas. “I think we’re not just opening a new chapter for Tesla, we’re starting a new book,” a jubilant Musk told shareholders at the company’s annual meeting.

The vote doesn’t end Tesla and Musk’s legal fights in Delaware, including over the compensation plan. But investors clearly believe that the electric-carmaker’s fortunes, and theirs, are inextricably linked to its C.E.O.

“We have the most awesome shareholder base,” Musk said Thursday.Tesla announced on Friday that 72 percent of votes cast at its annual meeting that aren’t held by Musk or his brother, Kimbal, were in favor of the pay plan. About 84 percent of votes cast, excluding the Musks’ shares, backed the reincorporation proposal.

DealBook hears that Tesla succeeded in getting retail investors, who were overwhelmingly supportive of Musk, to vote in far greater numbers than they usually do. But the company couldn’t have gotten the vote totals it did without support from Wall Street shareholders like Vanguard and BlackRock.

Wall Street thinks Tesla’s value is tied to keeping Musk happy. The company’s chair, Robyn Denholm, had urged shareholders to approve the proposals “to retain Elon’s attention and motivate him to continue to devote his time, energy, ambition and vision” to the business.

Musk critics pointed to moves that suggested he could undermine Tesla’s future if he didn’t get his way. Before the latest pay dispute, he had threatened to focus his artificial intelligence work at his other companies if he didn’t get greater voting control, and he admitted to diverting Nvidia A.I. chips meant for Tesla to X and xAI. (At least one new investor lawsuit filed in Delaware alleges that Musk essentially strong-armed shareholders to voting his way.)