Tesla shareholders approve CEO Musk’s $2.6 bln compensation plan

FILE- In this Feb. 6, 2018, file photo, Elon Musk, founder, CEO of SpaceX and CEO of Tesla Inc., speaks at a news conference after the Falcon 9 SpaceX heavy rocket launched successfully from the Kennedy Space Center in Cape Canaveral, Fla. Shareholders of electric car and solar panel maker Tesla Inc. are voting on a pay package for Musk that could net him more than $50 billion if he meets lofty milestones over the next decade that include raising the company's market value tenfold. (AP Photo/John Raoux, File)
Updated 21 March 2018
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Tesla shareholders approve CEO Musk’s $2.6 bln compensation plan

SAN FRANCISCO/BOSTON: Tesla Inc. shareholders approved a compensation package potentially worth as much as $2.6 billion for Chief Executive Elon Musk on Wednesday in a test of their confidence in the leader of the electric car company.
A Tesla spokesperson confirmed that shareholders had approved the measure at a special shareholder’s meeting in Fremont, California, but did not disclose the number of votes for or against.
The proposed compensation award for the Silicon Valley billionaire, valued at up to $2.6 billion, involves no salary or cash bonus but sets rewards based on Tesla’s market value rising to as much as $650 billion over the next 10 years.
Ahead of the vote, a top investor in Tesla Inc. and a major proxy adviser offered opposing views on whether to support the compensation arrangement, which required majority approval from shareholders.
The vote has been seen as a test of whether big investors are prepared to support such a large payout at the founder-led company.
Musk’s pay plan “is well aligned with shareholders’ long-term interests,” a spokesman for T. Rowe Price Group, Tesla’s fourth-largest investor with about 6 percent of its shares, told Reuters on Wednesday, without saying which way the Baltimore fund firm would vote.
Earlier this month, proxy advisory firm Institutional Shareholder Services recommended Tesla stockholders reject the package, saying the “unprecedented” award was too rich.
A smaller investor, the California State Teachers’ Retirement System (CalSTRS), also said it would oppose the award. CalSTRS is one of the nation’s largest public pension plans but only the 59th largest investor in the car maker, with a 0.13 percent stake.
“Given the size of the award, we believe the potential dilution to shareholders is just too great. In addition, we have concerns about the lack of focus on profitability for the company, and the one profitability metric that is used excludes the cost of stock-based compensation,” CalSTRS’ Director of Corporate Governance, Anne Sheehan, said in a statement before the vote.
Musk could own as much as $55.8 billion in Tesla stock and more than a quarter of the electric car company in the next decade if he hits all targets of the new plan.
Under the proposed award, which involves stock options that vest in 12 tranches, Tesla’s market value must increase to $100 billion for the first tranche to vest and rise in additional $50 billion increments for the remainder.
Tesla was valued at about $52.46 billion at Tuesday’s closing price, according to Thomson Reuters data. Its shares have fallen nearly 12 percent since the pay plan for Musk was announced.


Brent crude oil rises for a sixth day as supplies tighten amid strong demand

Updated 24 April 2018
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Brent crude oil rises for a sixth day as supplies tighten amid strong demand

  • US West Texas Intermediate crude futures were at $68.98 a barrel, up 34 cents
  • The potential of renewed US sanctions against Iran is pushing prices higher

SINGAPORE: Brent crude oil rose for sixth day on Tuesday, passing $75 a barrel, on expectations that supplies will tighten because fuel is rising at the same time the US may impose sanctions against Iran and OPEC-led output cuts remain in place.
Brent crude oil futures climbed to as high as $75.20 a barrel in early trading on Tuesday, the highest since Nov. 27, 2014. Brent was still at $75 a barrel at 0311 GMT up 29 cents, or 0.4 percent, from its last close.
Brent’s six-day rising streak is the most since a similar string of gains in December and it is up by more than 20 percent from its 2018 low in February.
US West Texas Intermediate (WTI) crude futures were at $68.98 a barrel, up 34 cents, or 0.5 percent from their last settlement. On Thursday, WTI rose to as high as $69.56, the most since Nov. 28, 2014.
Markets have been lifted by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) which were introduced in 2017 with the aim of propping up the market.
The potential of renewed US sanctions against Iran is also pushing prices higher.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA said new sanctions against Tehran “could push oil prices up as much as $5 per barrel.”
The US has until May 12 to decide whether it will leave the Iran nuclear deal and re-impose sanctions against OPEC’s third-largest producer, which would further tighten global supplies.
“Crude prices are now sitting at the highest levels in three years, reflecting ongoing concerns around geopolitical tensions in the Middle East, which is the source of nearly half of the world’s oil supply,” ANZ bank said.
“Oil strength is coming from Saudi Arabia’s recent commitment to get oil back up to between $70 to $80 per barrel as well as inventory levels that are back in the normal range,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
OPEC’s supply curtailments and the threat of new sanctions are occurring just as demand in Asia, the world’s biggest oil consuming region, has risen to a record as new and expanded refineries start up from China to Vietnam.
One of the few factors that has limited oil prices from surging even more is US production, which has shot up by more than a quarter since mid-2016 to over 10.54 million barrels per day (bpd), taking it past Saudi Arabia’s output of around 10 million bpd.
As a result of its rising output, US crude is increasingly appearing on global markets, from Europe to Asia, undermining OPEC’s efforts to tighten the market.