The war over Elon Musk’s payment package is intensifying as a major consulting firm recommends shareholders vote against it, and Elon Musk enthusiasts use tactics to scare.
In weeks, Tesla shareholders have voted on several new proposals put forward by the board of directors.
The two main proposals the board must approve are a new vote on Musk’s CEO pay package for 2018 and moving Tesla’s incorporation status to Texas.
The two are strongly related, as Tesla and Musk’s board of directors blamed the loss of a lawsuit invalidating the 2018 payment schedule on the fact that the lawsuit took place in Delware, where Tesla is incorporated.
Tesla was incorporated in Delaware, like many other American companies, because this state has incredibly business-friendly laws. However, Musk believes, without any evidence, that the judge’s ruling is politically motivated and believes that Tesla would have better luck in Texas.
And Tesla will want more luck, as the new shareholders’ vote on the refund package does not invalidate the judge’s resolution to cancel the program and more demanding legal situations are expected. Tesla’s own lawyers admit that this is necessarily a survey.
Regardless, Tesla has been pushing for shareholders to vote in favor of the package and in favor of Texas again.
As we previously reported, the company’s board of directors introduced an online page and even purchased classified ads to drive voting in that direction.
The shareholder war will intensify. We recently reported on a primary pension fund that announced it would vote against and encouraged other shareholders to do the same.
Today, Glass Lewis, a leading shareholder advisory firm whose clients come from a significant portion of major institutional investors, announced that it also voted against it, which it also did in 2018, and shareholders still approved the measure.
On the other hand, Musk’s army of enthusiasts is turning to fear to push voting in his direction.
We recently reported that Musk reiterated his risk of not making AI products at Tesla unless he had a 25% stake in the company.
Elon Musk’s new startup, xAI, was shown today to have raised $6 billion in a new Series B circular with a valuation of $24 billion.
Some of his biggest courtiers, such as unofficial propagandist leader Omar Qazi, are now pushing the concept that if they don’t give Musk everything he wants, he will target Tesla’s AI efforts through its new xAI funding:
This necessarily suggests that shareholders are caving in to Musk’s threat.
During the payment package litigation, Musk directly asked if shareholder rejection would force him to leave Tesla and he said no.
Things may have changed since then, however, but the CEO rarely comments on the matter at this point, who prefer to let their courtiers spread the concern that he would leave Tesla if they didn’t vote again on his pay package.
If Musk thinks he’s CEO while competing with Tesla and isn’t doing the best he can for the company, he’s not a major CEO. If Musk hinted at this without actively condemning it, he won’t be CEO, let alone give up. additional 10% of the company threatening him with dereliction of duty. Musk was a big boss when Tesla was in startup mode, and startup CEOs get a significant percentage from a small company. If Tesla’s board, which is also abandoned, replaced him with someone like Herbert Diess, Tesla would be much better off.
I find it difficult for Elon to leave Tesla if the package was not approved. That would be giving up and that’s not his style. Also, I haven’t noticed that many Tesla shareholders say they shouldn’t be paid.
I think the vast majority of shareholders agree that Elon should be paid. However, they need Tesla to address the apparent governance issues that led to the revocation of the package in the first place. This would arguably be more apparent than ever, as the board of directors of the directors, we, the CEO, will blatantly threaten the shareholders.
In my opinion, Tesla wants more powerful governance because Elon simply doesn’t have the right temperament to run a public company. As Leo Koguan, Tesla’s largest retail investor, said, Elon runs Tesla like a family-owned company.
We are now seeing the repercussions of the threats, the firing of all Supercharger groups to set an example for other executives and the cancellation of that compensation.
Fred is Editor-in-Chief and Senior Editor at Electrek.
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