In a filing with federal regulators early Wednesday, the company said it would ask shareholders to vote on both issues during its annual meeting on June 13. Photo via Getty Images

Tesla will ask shareholders to reinstate a $56 billion compensation package for CEO Elon Musk that was rejected by a judge in Delaware this year, and to move the electric car maker’s corporate home from Delaware to Texas.

In a filing with federal regulators early Wednesday, the company said it would ask shareholders to vote on both issues during its annual meeting on June 13.

In January, Chancellor Kathaleen St. Jude McCormick ruled that Musk is not entitled to a landmark compensation package awarded by Tesla’s board of directors that is potentially worth about $55.8 billion over 10 years starting in 2018.

Five years ago, a Tesla shareholder lawsuit alleged that the pay package should be voided because it was dictated by Musk and was the product of sham negotiations with directors who were not independent of him.

Musk said a month after the judge's ruling that he would try to move Tesla's corporate listing to Texas, where he has already moved company headquarters.

Almost immediately after the judge's ruling, Musk did exactly that with Neuralink, his privately held brain implant company, moving its corporate home from Delaware to Nevada.

In a letter to shareholders this week, Chairperson Robyn Denholm said that Musk has delivered on the growth it was looking for at the automaker, with Tesla meeting all of the stock value and operational targets in a 2018 CEO pay package that was approved by shareholders.

“Because the Delaware Court second-guessed your decision, 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,” Denholm 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.”

Tesla posted record deliveries of more than 1.8 million electric vehicles worldwide in 2023, according to a regulatory filing. But the value its shares has eroded quickly this year as sales of electric vehicles soften.

Future growth is in doubt and it may be a challenge to get shareholders to back a fat pay package in an environment where competition has increased worldwide and demand for electric vehicle sales is fading.

Tesla's shares have lost more than one third of their value this year as massive price cuts have failed to draw more buyers. The company said it delivered 386,810 vehicles from January through March, nearly 9% fewer than it sold in the same period last year.

Shareholders also will be asked to cast a nonbinding advisory vote on 2023 executive compensation.

But the proxy statement filed with the Securities and Exchange Commission does not address Musk’s demand to own 25% of Tesla shares for him to pursue artificial intelligence and robotics at the company. At present he owns 20.5% of the company.

In January Musk challenged the Tesla board in a post on X, the social media platform he now owns, to come up with a new compensation package. Unless he gets 25%, he wrote that he’d prefer to build products outside of Tesla, apparently with another company.

Wedbush analyst Dan Ives, who is normally bullish on Tesla, said in an interview that the filing doesn't address multiple issues including Musk's future compensation.

“It's the elephant in the room because Musk has threatened over X, and it's been a massive overhang" for Tesla stock, Ives said.

Musk, he said, needs to commit to being Tesla CEO for three to five years and developing artificial intelligence with the company. When the company announces first-quarter earnings next week, Musk needs to spell out plans for future growth, including the status of the Model 2, a small EV that costs about $25,000, Ives said. Otherwise, dark days lie ahead, he said.

“Investors are not just taking Musk's word,” he said. “There's a feeling like the plane is crashing into the ocean and the board is focused on their own salted peanuts.”

Musk has less leverage than he did in January because of this year's stock slide. “He went from Cinderella story to the Nightmare on Elm Street in a matter of six months,” Ives said.

At the time of the Delaware court ruling, Musk’s package was worth more than $55.8 billion, but the court may have cost the mercurial CEO over $10 billion due to the company’s stock slide this year. The filing said Musk’s 2018 compensation was worth $44.9 billion at the close of trading on April 12.

Since last year, Tesla has cut prices as much as $20,000 on some models. The price cuts caused used electric vehicle values to drop and clipped Tesla’s profit margins.

This week, Tesla said it was letting about 10% of its workers go, about 14,000 people.

In the filing, Tesla's board wrote that the decision to seek shareholder approval of Musk's 2018 pay package was made by the board after it received a report from a special committee of one board member, Kathleen Wilson-Thompson.

The board wrote that if there is any significant vote against future executive pay packages, “we will consider our stockholders' concerns, and the compensation committee will evaluate whether any actions are necessary to address those concerns.”

Shares of Tesla Inc., which slid another 8% this week, fell about 1% Wednesday.

The electric car company's CEO said early Thursday that Tesla would get shareholders to vote on whether to switch its corporate registration to Texas, where its physical headquarters is located. Photo courtesy of Tesla

Tesla investors potentially to vote on switching the carmaker's corporate registration to Texas

to be or not to be

Elon Musk wants Tesla investors to decide on moving the company's corporate listing to Texas after a Delaware court decided he shouldn't get a multibillion-dollar pay package.

The electric car company's CEO said early Thursday that Tesla would get shareholders to vote on whether to switch its corporate registration to Texas, where its physical headquarters is located.

“Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas,” Musk wrote on his social media platform X, formerly known as Twitter.

Musk had polled X users earlier on the same question, with 87.1% of 1.1 million respondents voting yes. “The public vote is unequivocally in favor of Texas!” he wrote.

Musk, who has previously polled people on X before making decisions, moved Tesla's headquarters to Austin, Texas, from California in 2021.

His announcement comes after a judge in Delaware, where the company is currently registered, ruled last Tuesday that Musk is not entitled to a landmark compensation package potentially worth more than $55 billion that was awarded by Tesla’s board of directors.

After the ruling, Musk took to social media to to express his displeasure.

“Never incorporate your company in the state of Delaware,” he wrote in one post. He later added, “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”

The ruling came five years after shareholders filed a lawsuit accusing Musk and Tesla directors of breaching their duties and arguing that the pay package was a product of sham negotiations with directors who were not independent of him.

The defense countered that the pay plan was fairly negotiated by a compensation committee whose members were independent and had lofty performance milestones.

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Gold H2 harvests clean hydrogen from depleted California reservoirs in first field trial

breakthrough trial

Houston climatech company Gold H2 completed its first field trial that demonstrates subsurface bio-stimulated hydrogen production, which leverages microbiology and existing infrastructure to produce clean hydrogen.

Gold H2 is a spinoff of another Houston biotech company, Cemvita.

“When we compare our tech to the rest of the stack, I think we blow the competition out of the water," Prabhdeep Singh Sekhon, CEO of Gold H2 Sekhon previously told Energy Capital.

The project represented the first-of-its-kind application of Gold H2’s proprietary biotechnology, which generates hydrogen from depleted oil reservoirs, eliminating the need for new drilling, electrolysis or energy-intensive surface facilities. The Woodlands-based ChampionX LLC served as the oilfield services provider, and the trial was conducted in an oilfield in California’s San Joaquin Basin.

According to the company, Gold H2’s technology could yield up to 250 billion kilograms of low-carbon hydrogen, which is estimated to provide enough clean power to Los Angeles for over 50 years and avoid roughly 1 billion metric tons of CO2 equivalent.

“This field trial is tangible proof. We’ve taken a climate liability and turned it into a scalable, low-cost hydrogen solution,” Sekhon said in a news release. “It’s a new blueprint for decarbonization, built for speed, affordability, and global impact.”

Highlights of the trial include:

  • First-ever demonstration of biologically stimulated hydrogen generation at commercial field scale with unprecedented results of 40 percent H2 in the gas stream.
  • Demonstrated how end-of-life oilfield liabilities can be repurposed into hydrogen-producing assets.
  • The trial achieved 400,000 ppm of hydrogen in produced gases, which, according to the company,y is an “unprecedented concentration for a huff-and-puff style operation and a strong indicator of just how robust the process can perform under real-world conditions.”
  • The field trial marked readiness for commercial deployment with targeted hydrogen production costs below $0.50/kg.

“This breakthrough isn’t just a step forward, it’s a leap toward climate impact at scale,” Jillian Evanko, CEO and president at Chart Industries Inc., Gold H2 investor and advisor, added in the release. “By turning depleted oil fields into clean hydrogen generators, Gold H2 has provided a roadmap to produce low-cost, low-carbon energy using the very infrastructure that powered the last century. This changes the game for how the world can decarbonize heavy industry, power grids, and economies, faster and more affordably than we ever thought possible.”

Rice University spinout lands $500K NSF grant to boost chip sustainability

cooler computing

HEXAspec, a spinout from Rice University's Liu Idea Lab for Innovation and Entrepreneurship, was recently awarded a $500,000 National Science Foundation Partnership for Innovation grant.

The team says it will use the funding to continue enhancing semiconductor chips’ thermal conductivity to boost computing power. According to a release from Rice, HEXAspec has developed breakthrough inorganic fillers that allow graphic processing units (GPUs) to use less water and electricity and generate less heat.

The technology has major implications for the future of computing with AI sustainably.

“With the huge scale of investment in new computing infrastructure, the problem of managing the heat produced by these GPUs and semiconductors has grown exponentially. We’re excited to use this award to further our material to meet the needs of existing and emerging industry partners and unlock a new era of computing,” HEXAspec co-founder Tianshu Zhai said in the release.

HEXAspec was founded by Zhai and Chen-Yang Lin, who both participated in the Rice Innovation Fellows program. A third co-founder, Jing Zhang, also worked as a postdoctoral researcher and a research scientist at Rice, according to HEXAspec's website.

The HEXASpec team won the Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge in 2024. More recently, it also won this year's Energy Venture Day and Pitch Competition during CERAWeek in the TEX-E student track, taking home $25,000.

"The grant from the NSF is a game-changer, accelerating the path to market for this transformative technology," Kyle Judah, executive director of Lilie, added in the release.

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This article originally ran on InnovationMap.