Elon Musk Justifies $1 Trillion Pay, Rejects ‘Robot Army’ Concerns
Elon Musk, the world’s richest individual, is advocating for an ambitious pay package from Tesla, valued at $1 trillion. He believes the proposal addresses his need for influence over the company’s future direction, particularly in advancing artificial intelligence and robotics.
Pay Package Proposal Justification
During Tesla’s recent earnings call, Musk expressed his concerns about potential opposition to his leadership. He criticized advisory firms, ISS and Glass Lewis, for encouraging shareholders to reject the pay plan, labeling them as “corporate terrorists.” Musk emphasized that this pay package is not merely about personal wealth; it aims to secure his influence in steering Tesla’s future innovations, including AI and robotaxis.
Performance Targets and Stock Options
The $1 trillion compensation plan involves awarding Musk up to 420 million shares based on his ability to meet specific performance goals. These objectives include:
- Achieving an $8.5 trillion market capitalization.
- Delivering 20 million Tesla vehicles.
- Deploying 1 million operational robotaxis.
Musk’s ownership stake in Tesla could increase from approximately 13% to nearly 29% if the plan is approved at the annual meeting scheduled for November 6. Tesla’s Board believes that Musk is crucial for guiding the company through this vital transition and retaining him is essential for maintaining the momentum of its ambitious goals.
Market Perspective
Since the announcement of the pay package, Tesla’s stock has rebounded, rising more than 15% year-to-date. Initially, the stock had declined approximately 10% earlier this year. The Board stated, “While we believe Elon is the only person capable of leading Tesla at this critical inflection point, changing the world is neither an overnight process nor the work of a single person.”
The Importance of Control
Musk has long argued that significant control is necessary for effective leadership, especially concerning complex innovations. He pointed out that without around 25% voting control, he feels uncomfortable leading Tesla’s advancements in AI and robotics.
He remarked on social media platform X, “I would prefer to build products outside of Tesla” without adequate control. Musk noted that Tesla is more than a single startup; it encompasses multiple ventures, contrasting it with traditional automakers like GM.
Conclusion
As the debate around Musk’s compensation continues, his focus remains on retaining the necessary influence to guide Tesla into a future centered around groundbreaking technology. With the proposal set for a vote soon, its outcome could significantly impact both Musk’s personal stakes and Tesla’s strategic direction.
