Elon Musk Vows to Prevent ‘Corporate Terrorists’ from Seizing Tesla Control
Elon Musk is focusing on enhancing his influence at Tesla while addressing concerns about potential external threats to company control. During a recent investor call, he discussed the importance of a substantial pay package that would help safeguard Tesla from external advisory firms.
Corporate Control and Advisory Firms
Musk has criticized two research firms, ISS and Glass Lewis, which offer voting recommendations to shareholders. He referred to them as “corporate terrorists,” expressing his discomfort about their influence on Tesla’s governance. Musk believes these firms lack a comprehensive understanding of Tesla’s operations.
He stated, “I just don’t feel comfortable building a robot army and then being ousted because of some asinine recommendations.” Musk fears that following these recommendations could have detrimental effects on Tesla’s future.
Shareholder Dynamics
Musk noted that many passive investment funds tend to endorse the recommendations from ISS and Glass Lewis without critical evaluation. However, shareholder votes have traditionally aligned with Tesla’s board recommendations. For instance, a significant pay package for Musk received overwhelming support in past votes.
- In 2018, shareholders voted 73% in favor of Musk’s previous package.
- After judicial review, a revised package gained 84% approval.
Current Pay Package Proposal
The new compensation plan is designed to incentivize Musk while also reflecting the board’s strategy for Tesla’s future. If approved, the package could enable Musk to purchase an additional 423.7 million shares of Tesla stock, contingent on the company meeting certain valuation targets.
Musk currently holds 413 million shares in Tesla and has options for an additional 304 million shares, although legal challenges have affected these options.
Future Vision and Implications
Musk’s objective is to acquire approximately 10% more of Tesla. Should his pay package pass, the shares could potentially be worth close to $1 trillion, based on higher valuation targets.
The proposal from Tesla’s board underscores the need to retain Musk’s leadership to achieve expansive company goals amid his diverse interests, including SpaceX and AI ventures.
The debate surrounding Musk’s pay package and the influence of external firms continues to unfold, reflecting broader concerns regarding corporate governance in influential tech firms.
