Copyright The New York Times
Tesla’s shareholders will decide this week whether the automaker should award its chief executive, Elon Musk, stock worth almost $1 trillion if he achieves a series of impossible-sounding goals. But there are big questions about how tough those goals really are. Mr. Musk would acquire voting control over nearly 29 percent of Tesla shares if he met all of the targets in a 10-year performance plan. Among other things, the company would have to deploy one million humanlike robots and boost its stock market value to $8.5 trillion from $1.4 trillion today. That sounds difficult. But the plan would also allow Tesla’s board of directors to grant Mr. Musk a portion of the shares even if he fell short. Some corporate governance experts said the board, which includes Mr. Musk’s brother and several longstanding friends and business associates, could award him shares regardless of his performance. “These are not independent decision makers,” said Dorothy Lund, a professor at Columbia Law School who teaches and writes about corporate governance. She cited a Delaware court decision that struck down a previous pay plan for Mr. Musk in part because the judge found that many Tesla directors were too close to him personally or owed their wealth to him. Tesla has criticized that decision as violating the will of Tesla shareholders, who approved the earlier plan by large margins twice. The Delaware Supreme Court is expected to rule soon on the company’s appeal. Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times. Thank you for your patience while we verify access. Already a subscriber? Log in. Want all of The Times? Subscribe.
