The future of Elon Musk and Tesla is on the line this week as shareholders vote on a massive pay package.

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DETROIT – If Tesla shareholders vote Thursday against restoring Elon Musk's $44.9 billion pay package, the CEO could threaten to take artificial intelligence research to one of his other companies. . Or he could go away.

If he approves the all-stock compensation package that was thrown out by a Delaware judge in January, it would almost guarantee that he will stay at the company that has become the global leader in electric vehicles. It has moved into AI and robotics, including autonomous vehicles, which Musk says are Tesla's future.

But even with re-approval at Thursday's annual shareholders meeting, which many analysts say is likely, there will be uncertainty. Musk has threatened on his social media platform X that he will develop AI elsewhere if he doesn't acquire a 25 percent stake in Tesla (he now owns about 13 percent). Musk's XAI recently secured $6 billion in funding to develop artificial intelligence.

Wedbush analyst Dan Ives said he expects the package to be re-approved overwhelmingly, removing much of the uncertainty with Musk. “This issue has been an overhang on Tesla stock, and it will be important to move this distraction into the rearview mirror,” Ives wrote in a note to investors.

Tesla Inc. Shares have fallen more than 30% this year after the company warned of “significantly low” sales growth this year.

Also on the shareholder ballot is the related issue of moving the electric vehicle maker's legal home from Delaware to Texas.

The move is designed to avoid oversight by a Delaware court and possibly an order from Chancellor Kathleen St. Jude McCormick, who voided Musk's pay package. In a January opinion on the shareholder lawsuit, the judge determined that Musk controlled the Tesla board and was not entitled to the historic package that was worth about $56 billion.

A number of institutional investors have come out against the big payout, some citing declining vehicle sales, price cuts and a falling Tesla stock price. But Tesla's top five institutional shareholders, Vanguard, BlackRock, State Street, Geode Capital, and Capital Research, either said they would not announce their votes or would not comment. They hold about 17 percent of the votes.

Eric Gordon, a professor of business and law at the University of Michigan, said individual shareholders are likely to vote down the package and own more than half of Tesla's shares.

One investor that has come out against the package is Norway's sovereign wealth fund, run by Norges Bank Investment Management. He said late last week that he would not vote on Thursday.

“While we appreciate the significant value created under Mr. Musk's leadership since the grant date in 2018, we remain concerned about the total award size, performance incentives, vulnerability, and lack of key person risk mitigation. I remain concerned,” Norges Bank Investment Management said in a prepared statement.

In May, two major shareholder advisory firms, ISS and Glass Lewis, recommended a vote against the package.

But Tesla and Musk have made a strong lobbying effort to get the package approved in posts on X, television appearances and proxy filings with the U.S. Securities and Exchange Commission.

“There are only 2 days left to help protect and grow the value of your investment in $TSLA by voting to endorse the 2018 CEO Performance Award,” Tesla posted on X early Tuesday.

Tesla chairwoman Robin Den Holm wrote in a letter to shareholders that six years ago the package was approved by 73 percent of the vote. “Because the Delaware court second-guessed your decision, Elon has not been paid for any of his work for Tesla over the past six years that has helped create significant growth and stockholder value. “This strikes us – and many of the stockholders we have already heard from – as fundamentally unfair, and inconsistent with the will of the stockholders who voted for it,” he wrote.

Tesla has said the 2018 award motivated Musk to create more than $735 billion in value for shareholders in the six years following its approval.

If Tesla finalizes a vote on moving the company's legal home to Texas before the vote on Musk's pay package, and manages to file the paperwork in Austin and get approval for the move, So the effect of the Delaware court's decision may be in doubt. Pay Package will be reclassified as a Texas corporation and subject to the jurisdiction of Texas courts.

Anticipating Tesla's quick move, shareholder attorneys who sued to block Musk's pay deal, Richard Tornetta, filed motions in Delaware last month seeking to transfer the case to Tesla. It was ordered to stop. Tesla responded in letters to the judge that there was no reason for such concerns because it would not take any action. In addition, Tesla will still be a Delaware corporation at the time of this week's shareholder vote, he wrote.

In an order denying Tornetta's motions, Chancellor McCormick wrote that she interpreted Tesla's letters to mean it had no intention of moving the case to Texas. “I am greatly comforted by the defendants' statements,” he wrote.

Columbia University law professor Eric Tilley said lawyers are unlikely to try to pursue the case because their livelihood is handling business cases in Delaware courts.

But it's also possible that the unpredictable Musk could switch lawyers.

McCormick, Tilley said, is telling the lawyers “OK, I'm going to believe you, but if it's a big send-off for the things you said you're not going to do.” If there are, I'll be really angry.”

Talley, who is also a Tesla shareholder and said he plans to vote against Musk's pay at this time, expects Tesla to appeal McCormick's decision to the Delaware Supreme Court.

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