New York:

Electric vehicle maker Tesla will ask its shareholders to vote again on a $56 billion compensation package they had approved in 2018 for CEO Elon Musk before it was squashed by a US court earlier this year.

In a filing with federal regulators on Wednesday, Tesla Chair Robyn Denholm said the board of directors stood by the original package and argued that the company’s “entrepreneurial spirit” had always been one of “big risks for the chance of big rewards.”

Musk’s payout — worth as much as $55.8 billion in 2018 — was voided in January by a Delaware court, ruling on a complaint by an individual shareholder alleging that Musk had dictated his terms to the board, which was not sufficiently independent from its star CEO.

In the filing with the Securities and Exchange Commission, Denholm expressed the board’s continued opposition to the court ruling, insisting it was not how corporate law “should or does” work.

“Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value,” she wrote.

“That strikes us — and the many stockholders from whom we already have heard — as fundamentally unfair, and inconsistent with the will of the stockholders who voted for it.”

In a second proposal ahead of the June 13 shareholder meeting, the carmaker asked shareholders to support moving the company’s state of incorporation from Delaware to Texas, which “is Tesla’s home,” Denholm said in the filing.

Layoffs, deliveries down

The proposals come amid a difficult stretch for Tesla, whose shares have fallen 37 percent so far in 2024 compared with a gain of about six percent in the S&P 500 over the same period.

Earlier this week, Tesla announced it would lay off more than 10 percent of its global workforce.

That move comes after Tesla reported a drop in first-quarter auto deliveries in a decline seen as reflective of rising competition among electric vehicle producers and slowing demand growth in some markets.

For Brian Dunn, a lecturer at Cornell University specialized in compensation studies, “no truly independent board would ever grant a package of this size to the CEO of a company that is clearly struggling.”

Wedbush analyst Dan Ives chimed in: “The proxy and shareholder meeting combined with the current state of affairs at Tesla all sets up for more fireworks over the coming months.”

Ives said in a note that Musk needs to address market speculation that the company is shelving plans for a mass-marketed EV at a lower price point — a much-anticipated project often referred to as “Model 2.”

“We believe no Model 2 rollout in the next 18 months would be a disaster gamble that would likely change the growth story of Tesla the next few years,” Ives said.

Shares of Tesla closed down 1.06 percent.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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| Photo Credit: Reuters

U.S. electric carmaker Tesla is looking at potential showroom locations in New Delhi and Mumbai ahead of plans to begin sales in India later this year, two people familiar with the discussions said.

Tesla, which saw its global vehicle deliveries decline in the first quarter for the first time in nearly four years, is stepping up efforts to expand into new markets.

It wants to begin with a showroom of 3,000 to 5,000 square feet (280-465 square metres) as well as a service hub in each city, said one of the people familiar with the plans.

The automaker has begun production of right-hand drive cars at its plant in Germany for export to India, separate sources have said.

India last month cut electric vehicle import taxes to 15% from as much as 100% for automakers that invest at least $500 million and set up a factory.

Tesla Chief Executive Elon Musk is expected to make an investment announcement and meet Prime Minister Narendra Modi during a two-day visit to India from Sunday. Mr. Musk and Mr. Modi last met in New York in June.

Tesla executives started looking at locations last month and have held talks with several real estate developers as they look at potential high street and mall sites, one of the sources said. The person added that the company is keen to begin construction soon so that the showrooms can open in 2024.

The sources declined to be identified as discussions were confidential. Tesla did not immediately respond to a request for comment.

Tesla is grappling with slower growth for electric vehicles in both its main markets of the United States and China. Reuters reported this month that Tesla has cancelled a long-promised inexpensive car that investors have been counting on to drive mass market growth.

Demand for electric cars in India – the world’s third-largest auto market – is expected to rapidly climb. EVs made up just 2% of India’s total car sales in 2023, but the government has said it wants 30% of all new car sales to be electric from 2030.