Tesla CEO Elon Musk jumped in at the end of the automaker’s earnings call to express to investors why they should approve his $1 trillion pay package, arguing that it isn’t necessarily about the money but about having enough power at the helm.
“The point is, I just like… there needs to be enough voting control to give a strong influence, but not so much that I can’t be fired if I go insane,” he said moments after Tesla CFO Vaibhav Taneja asked shareholders to support Musk’s leadership through the compensation proposals and the reelection of three directors, which would preserve the current leadership structure.
How much power someone has to make decisions at a company is determined by the shares they own. Voting control means having enough shares (or voting power) to influence or decide the company’s key decisions.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 448.98 | +10.01 | +2.28% |
TESLA GRANTS MUSK MASSIVE PAY DEAL TO KEEP CEO ON BOARD AMID LEGAL BATTLE
Since Tesla is a public company, Musk said there is no way to increase his voting control because rules prevent creating special “super-voting” shares or changing ownership structures after an IPO.
“But for example, Google, Meta, many other companies have this, but they had it before they went public. And so it sort of gets, I guess, grandfathered in. Tesla does not have that. So it’s just – like I said, I just don’t feel comfortable building a robot army here…and then being ousted because of some…recommendations from ISS (Institutional Shareholder Services) and Glass Lewis who have no freaking clue.”
MUSK SAYS HE WILL REMAIN TESLA CEO IN COMING YEARS
ISS and Glass Lewis are proxy advisory firms who advise investors on how to vote in shareholder meetings.
“The core problem here is that so many of the index funds, the passive funds vote along the lines of whatever Glass Lewis and ISS recommend. Now they have made many terrible recommendations in the past that, if those recommendations had been followed, would have been extremely destructive to the future of the company,” Musk continued.
TESLAS CONTINUE TO BE VANDALIZED DESPITE CEO ELON MUSK’S FALLOUT WITH WHITE HOUSE
Tesla’s board of directors initially proposed the new compensation plan for Musk in September. It could be worth a potential $1 trillion, marking what would be the largest pay package for an executive in history, if certain ambitious targets are reached.
The board’s proposal would give Musk, already the richest person in the world, up to 12% of Tesla’s stock, worth about $1 trillion, if the automaker notches a market capitalization of $8.5 trillion as well as other operational milestones over a 10-year period. The company’s current market value is about $1.38 trillion.
Musk currently owns about 13% of Tesla’s outstanding shares. The proposed award comes in the form of restricted stock grants, which means he can’t immediately sell them.
At the time, Tesla Chair Robyn Denholm said in a letter to investors that “retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history.”
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