Tesla Inc (NASDAQ:TSLA) boss Elon Musk is embroiled in multiple legal and shareholder disputes as his controversial $56 billion pay package comes to a critical vote today, but he said today that the shareholder resolutions "are currently passing by wide margins".
A major instituonal investor, the Employees' Retirement System of Rhode Island (ERSRI), this week filed a lawsuit accusing Musk and his brother Kimbal of insider trading, alleging that they sold a combined $30 billion in Tesla stock between late 2021 and 2022, while aware of negative news that would soon affect the stock's value.
This lawsuit is compounded by claims that Musk sold shares to finance his acquisition of Twitter, now X, without disclosing this plan to investors.
Musk’s pay package, initially awarded in 2018, was voided earlier this year by a Delaware judge who criticised the transparency and independence of Tesla’s board.
To overcome this, Musk and the board, led by chair Robyn Denholm, have been lobbying vigorously for shareholders to approve a revised compensation plan.
In a late-evenig Tweet, Musk said on his social media platform that both resolutions were on track to pass by wide margins, though the results he cited are preliminary.
Both Tesla shareholder resolutions are currently passing by wide margins!
♥️♥️ Thanks for your support!! ♥️♥️ pic.twitter.com/udf56VGQdo
— Elon Musk (@elonmusk) June 13, 2024
Musk's handling of Tesla's resources has also been questioned, with the ERSRI lawsuit claiming he diverted Tesla employees to work on X and his AI ventures, including his new company, xAI. He also recently was reported to have diverted microchips away from Tesla.
Concerns about conflicts of interest have been raised, particularly around Musk's prioritisation of AI developments outside Tesla.
Adding to the turmoil, Musk was also hit on Wednesday with allegations of creating a hostile work environment at SpaceX, with eight former employees filing a lawsuit citing sexual harassment and retaliation.
This has compounded the scrutiny on Musk, already under a regulatory probe for potential securities law violations related to his Twitter stock acquisition.
The shareholder vote on Musk's pay package has polarised investors.
While some major stakeholders like Baillie Gifford and Ark Investment Management support it, others said they opppose it, including Norway’s oil fund and Calpers, citing concerns over its size and structure.