The results of a vote on whether Tesla boss Elon Musk can get a giant pay package are due on Friday morning NZ Time.
Tesla shareholders will vote this morning NZ Time on whether to restore the giant US$56 billion ($94.6b) pay package for chief executive Elon Musk that was struck down by a Delaware judge this year.
The 2018 pay package was nullified in January and Tesla is relying on a legal principle known as “ratification”, in which the validity of a corporate action can be cemented by a shareholder vote – to try and get it over the line.
Kiwi Tesla shareholders have also climbed on board to vote this week with Sharesies enabling voting through its platform. A Sharesies spokeswoman said it had had a big response. Around 50,000 of its users own Tesla shares with a total value of around $120 million.
More than 50 per cent of the shares were voted on and 93 per cent were in favour of Elon’s remuneration package. Of those who voted 92 per cent were also in favour of Tesla moving its headquarters from Delaware to Texas.
But small retail investors might not do much to sway the vote. The Financial Times reported this week that large proxy advisers and institutional shareholder services have recommended voting against the pay.
Even if the vote gets over the line it’s not certain that the payout will actually go ahead given it is the first time a company has tried to use the principle.
“The [Tesla board] special committee and its advisers noted that they could not predict with certainty how a stockholder vote to ratify the 2018 CEO performance award would be treated under Delaware law in these novel circumstances,” it said in a proxy statement sent to shareholders.
The NZ sharemarket got a slight boost yesterday after US markets hit another new high when inflation came in softer than expected prompting expectations of a Federal Reserve interest rate cut.
But the NZX50 is struggling to stay in positive territory for the year to date. As of lunchtime Thursday it was up just 0.6 per cent for the entire year so far. Still, that is better than the 12 per cent decline it had in 2023.
A lot depends on when interest rates are likely to fall. The Reserve Bank of New Zealand is not forecasting a cut until September next year although economists are picking it could be sooner than that with a consensus forming around February.
Softer than expected economic data in the second half of this year could easily shift that.
The US Federal Reserve yesterday signalled one interest rate cut this year. That is a far cry from the six cuts it was forecasting at the start of the year.
Harbour Asset Management’s Shane Solly says the Fed may be at risk of revising that soon with the US labour market likely to soften materially over the northern summer.
“Markets think the first easing will come in September, and labour market and inflation projections then suggest the Fed will be scrambling to catch up after starting to ease too late.”
Solly said the quote of the day after the Federal Open Market Committee release was: “The Fed dot plot will have the shelf life of Liz Truss’s lettuce.”
The dot plot refers to the Fed’s forecasting model. The Daily Star ran a YouTube video asking if UK Prime Minister Liz Truss could outlast the 10-day shelf life of a lettuce at 38 days into her tenure. She lasted just 49 days in office – the shortest term of any UK PM.
Air New Zealand says chief corporate affairs officer Mat Bolland will leave the company on July 31, as part of a wider review of costs.
“The economic challenges faced by the airline have led to an extensive review of costs, requiring the company to make some difficult decisions to manage these costs,” chief executive Greg Foran said.
In April, Air NZ said full-year earnings before tax for the year to June 30 will likely be between $190 million and $230m because of softer revenue conditions. That was down from February guidance of $200m to $240m.
“Air New Zealand has continued to see softening in revenue conditions over the fourth quarter both domestically and on the North American market,” the company said in April. Bolland joined Air NZ in May 2021, helping the airline navigate its Covid recovery and establishing relationships with government, regulatory and media stakeholders.
Chief sustainability officer Kiri Hannifin will commence a consolidated role of chief sustainability and corporate affairs officer from June 24. Bolland will continue to consult until July 31 to complete some key initiatives.
Stock Takes asked if the cost review meant any other jobs were being cut but a spokeswoman for the airline said it didn’t have anything else to add to the NZX announcement.
Investors in Maui Capital’s Aqua Fund are expected to double their initial investment in Equipment Leasing and Finance (ELF), after its sale to Anchorage Capital Partners.
Anchorage, a Sydney-based private equity firm, took ownership on May 31 via acquisition vehicle Waka BidCo. ELF has an asset financing arm, Speirs Finance, and a heavy machinery sales and servicing division AB Equipment.
Investors in ELF group included Maui Capital’s Aqua Fund, Milford Asset Management and USX-listed Speirs Group.
Maui Capital’s Aqua Fund’s quarterly update for the period ended March 31 said the conditions of the deal had been settled in early May with settlement expected May 31.
BusinessDesk reported that the latest update from Maui Capital MD Paul Chrystall said the deal would deliver net proceeds of about 29 cents per fund share and would return about twice what Maui invested in the company, which was $42.5 million.
Investors were told they would get about 20c per fund share at the beginning of June, with the transaction to be paid out in three instalments over a year.
Chrystall’s update indicated later payments were fixed and were not performance-related.
Speirs Group – whose primary business is premixed salads – told investors in late May it had already received a first payment for its 2.29 per cent stake, which it would use to pay debt.
Speirs Group founder Nelson Speirs started Speirs Finance, which still bears his name.
The Australian Financial Review reported that NZ Super Fund was among entities involved in financing the transaction but a spokesperson said it would not comment on speculation.
The AFR described Speirs Finance as having a $700m loan book and said AB Equipment was a $500m a year sales and maintenance business.
AB Equipment was sold to Maui by then NZX-listed Hellaby Holdings in 2016 for $81 million.
Castle Point founder Richard Stubbs has left the business following its acquisition by Perpetual Guardian Investments.
The boutique fund manager told clients about Stubbs’ departure this week noting that Tim Chesterfield had been appointed sole portfolio manager of its Ranger and trans-Tasman Funds.
Stubbs set up Castle Point along with Stephen Bennie, James Young and Gordon Sims in 2013 after the team were made redundant from Tower’s investment business following its acquisition by Fisher Funds.
Young and Sims continue to remain at Castle under the new management.
Chesterfield has wide-ranging experience with 35 years as a global equity investor, 15 years of which was spent focused on US equities.
– Additional reporting by BusinessDesk
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