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Tesla wants shareholders to vote again on Musk's $56 billion payout

Vote on Elon Musk's $56 billion pay package
Tesla to vote on Elon Musk's $56 billion pay package after mass layoffs 02:38

Tesla is asking shareholders to vote again on Elon Musk's $56 billion pay package in 2018 after a Delaware judge nullified the biggest compensation plan in corporate America. 

In a proxy filing published Wednesday, the electric-car manufacturer also stated it would hold a vote on moving its state of incorporation to Texas from Delaware. Tesla is set to hold its annual shareholders meeting on June 13.

The request comes days after news that Tesla would reduce its headcount by 10% globally, or about 14,000 people. In a letter to stockholders, Tesla cited the need to carefully manage its resources for its decision.

In looking to re-ratify Musk's 2018 pay package, Tesla argued that "corporate democracy and stockholder rights" are at stake, telling shareholders the court had "rescinded the pay package that an overwhelming majority of you voted to grant."

A Delaware judge in late January threw out the share-based payout, calling it an "unfathomable sum" and unfair to shareholders. In her ruling, the judge accepted the shareholder lawyers' argument that Musk personally dictated the landmark pay package in sham negotiations with directors who were not independent.

The ruling had some investors anticipating that Tesla might revamp its governance, as the board had long faced criticism for not reining in its controversial CEO as Musk battled with advertisers and regulators.  

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