Tesla is facing a tough battle as it prepares to ask shareholders to reinstate a $56 billion compensation package for CEO Elon Musk that was previously rejected by a judge in Delaware. The company also plans to seek approval to move its corporate home from Delaware to Texas during its annual meeting on June 13. In a filing with federal regulators, Tesla stated that Musk has not been paid for any of his work for the past six years, despite delivering significant growth and stockholder value. The rejected compensation package, potentially worth $55.8 billion over 10 years, was ruled against by Chancellor Kathaleen St. Jude McCormick earlier this year.

In response to the judge's ruling, Musk swiftly moved the headquarters of his brain implant company, Neuralink, from Delaware to Nevada. Musk has expressed his intention to move Tesla's corporate listing to Texas, where he has already relocated the company's headquarters. Despite posting record deliveries of over 1.8 million electric vehicles worldwide in 2023, Tesla's shares have plummeted nearly 40% this year as competition in the electric vehicle market intensifies and demand softens.

The filing also revealed that Musk's 2018 compensation was valued at $44.9 billion as of April 12, following a significant drop in Tesla's stock price. The company has slashed prices on some models by as much as $20,000, leading to a decline in profit margins and a decrease in used electric vehicle values. In response to these challenges, Tesla announced plans to lay off approximately 10% of its workforce, affecting around 14,000 employees.

Despite these setbacks, Tesla's board is pushing for shareholder approval of Musk's compensation package, citing his role in driving growth and stockholder value. However, with Tesla's shares continuing to slide, it remains to be seen whether shareholders will support such a hefty pay package in the current market environment. The board has also indicated that it will consider stockholders' concerns regarding executive compensation and take appropriate actions if necessary.

Tesla's shares, which have already plunged 8% this week, are expected to face further volatility as the company navigates its annual shareholders meeting and seeks approval for Musk's compensation package. The future of Tesla and Musk's compensation package hangs in the balance as shareholders weigh the company's performance against the challenges it faces in the competitive electric vehicle market.