Tesla plans to request that shareholders approve Musk’s multibillion-dollar salary again after a judge rejected it.

Tesla will ask its shareholders to vote to approve the 2018 pay package that made CEO Elon Musk among the world’s richest people but that a Delaware judge threw out earlier this year.

Musk received options under the compensation package to purchase 303 million split-adjusted Tesla shares at a price of $23.34 per share. At the time that a Delaware court threw out the pay package in January, it was worth $51 billion. But a drop in the value of Tesla shares since then has reduced its value to $40.7 billion.

73% of the Tesla shares that were not owned by Musk or his brother at the time cast votes in support of the package at the original vote in 2018. Ratification will restore Tesla’s stockholder democracy,” the firm stated in a proxy statement it filed with the Securities and Exchange Commission early on Wednesday, outlining the details of the vote.

Delaware Chancery Court Chancellor Kathaleen McCormick ruled in January that Musk and the Tesla board “bore the burden of proving that the compensation plan was fair, and they failed to meet their burden.”

In its filing on Wednesday, Tesla claimed that because the value of its shareholders’ shares had increased since 2018, the compensation package was just.

In the proxy, Tesla chairwoman Robyn Denholm stated, “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 because the Delaware Court second-guessed your decision.” “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.”

The case was brought in Delaware because that’s where Tesla and many other major companies are incorporated. In January, Musk tweeted, “Never incorporate your company in the state of Delaware,” in response to the ruling.

In a subsequent tweet at that time, he stated, “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters.”

Not long after, he revealed plans to change Tesla’s state of incorporation to Texas, the location of its current headquarters. The motion of incorporation was also requested to be approved by shareholders in the filing on Wednesday.

Denholm declared, “Texas is already our business home, and we are committed to it.”

Not yet a new benefit package

The proxy made no mention of Musk’s future compensation for his role at Tesla. He would be compensated for reaching his financial objectives and increasing the market value of Tesla’s stock with the 2018 package. Musk solely earns stock options in response to various accomplishments made by the company; he does not receive a fixed income.

Shortly before the court’s ruling in January, Musk stated that he needed to boost his Tesla ownership in order to guard against outside investors taking over the business.

“Growing Tesla to be a leader in robots and AI without having about 25 percent voting control makes me uneasy. Musk stated in a post on X that he had “enough influence to be significant, but not so much that I can’t be overthrown.” “I would prefer to build products outside of Tesla unless that is the case.”

He stated that before implementing a new compensation plan, the Tesla board was awaiting the court’s verdict in this particular instance. It’s unclear if, should the shareholders once more approve the 2018 pay agreement, a follow-up package would be revealed.

Lawyers claimed that the 2018 vote was manipulated.

The claim was filed by shareholders, who said that the excessive number of stock options and the directors’ close proximity to Musk prevented them from acting in the best interests of the company’s stockholders.

Additionally, they contended that the financial benchmarks that the business had to meet in order for Musk to be eligible for each of the 12 distinct blocks, or “tranches,” of shares were not “stretch performance goals,” as the business had claimed to have informed shareholders when requesting their acceptance of the package.

The plaintiffs’ attorneys countered in court that the milestones were substantially the same as the company’s internal growth estimates that were being shared with banks and rating agencies. Consequently, those attorneys said, the original shareholder vote was contaminated by that misrepresentation.

Tesla is going through a difficult period.

Following the filing, Tesla’s stock barely moved in premarket trade. In the face of heightened competition and slower-than-anticipated growth in the demand for electric vehicles, the firm has recorded its first year-over-year decline in revenues since the pandemic’s peak. As a result, shares have lost 38% of their value so far this year.

Tesla briefly lost its position as the world’s top manufacturer of electric vehicles to Chinese automaker BYD in the fourth quarter of last year, but despite a decline in sales, it reclaimed the crown in the first quarter.

To keep the demand for its cars strong, however, it had to lower its pricing. Its profit margins have been compressed by those price reductions, but it is still significantly more profitable than established automakers like Ford and General Motors.

Musk said over the weekend that it will be laying off almost 10% of its 140,000 global employees, and a number of senior executives also announced their departure from the company.

Updates to this story provide background and more reporting.