Hey, everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads that shape SpaceX, Tesla X, The
Boring Company and Neuralink. I'm your host, Will Walden.
Today's episode revolves around the $56 billion compensation
package for Elon Musk as the CEO of Tesla.
Now Tesla investors are poised to vote on this pay package.
This is the company's proposed relocation from Delaware to
Texas. And at an important shareholder
meeting this week, analysts warn at the risk that must could
leave Tesla to focus on other ventures such as his AI startup
XAI, social media platform X. And that is if the pay package
is rejected. Remember, this is the largest
pay package for any CEO, anytime, ever in the history of
humanity. The voting on Musk's
controversial pay package is set to conclude on Thursday, with
major consequences for both Musk and Tesla.
And over recent weeks, Musk has actively campaigned to persuade
shareholders to reinstate his nearly $50 billion pay package,
which the Delaware judge who voided it described as the
largest ever observed in public markets.
Now, Tesla released a video featuring Optimus, which is Elon
Musk and Tesla's humanoid robot, instructing shareholders on how
to cast their ballots. Voters were offered a chance to
win a Musk escorted tour of Tesla's Gigafactory in Austin.
And Musk has been vocal on X, his social media platform, about
the vote predicting a win and claiming the public sentiment in
is unequivocally supportive. Now, as the vote approaches, the
outcome remains uncertain. Major shareholders are divided
on whether Musk, often seen as a distracted leader, deserves such
a substantial reward. The final decision may rest on
individual investors, many of whom are drawn to Musk's public
persona as a genius. Now.
The vote has broad implications for Tesla, though, which has
faced challenges such as weak sales, global competition and
mass layoffs. And Musk has indicated he might
leave Tesla if the pay package is denied, potentially pursuing
advanced technology projects elsewhere.
He's threatening people. And if approved, Musk would gain
more control over Tesla's board through stock options.
Now, Tesla Chairperson Robin Denholm has urged investors to
support Musk, emphasizing his unique contributions to the
company. He said Elon's unique
contributions have built Tesla from a company that was in 2018,
a loss making ambitious company with significant hurdles and
challenges to overcome into what it is today, a company that is
literally changing the world. However, critics like New York
City Comptroller Brad Lander argue that the package is
unreasonable given Tesla's struggles and Musk's divided
focus among various ventures. He said we need a full time CEO
who's focused on growing the company and producing great
shareholder returns, not allowing for a distraction or
chasing shiny new objects. Now.
In 2018, a majority of Tesla shareholders approved Musk
compensation package worth $56 billion in stock options instead
of a salary. This propelled Musk to become
the world's richest person, funding his ventures into space.
Brain Digitization and acquiring Twitter's de facto town square.
However, some shareholders sued, claiming the process was
improper. Now earlier this year, a
Delaware judge invalidated the pay package, calling it an
unfathomable sum and noting that it was approved by a board
filled with Musk's friends and a former divorce lawyer.
The board now asked shareholders to restore the package, which
would increase Musk's voting power to nearly 25% and
authorized Tesla's corporate move to the state of Texas.
Now, the votes outcome is uncertain, with some key
investors opposing the package and others remaining silent.
Major institutional investors like Vanguard Group, BlackRock
and State Street Corp, holding about 17% of Tesla stock
collectively, have not publicly declared their positions.
None responded to our requests for comment.
At this point. Now about 40% of Tesla's stock
is held by non institutional investors, including individual
retail investors. And many are Musk supporters,
such as billionaire Ron Baron, who called Musk indispensable to
Tesla and asserted that his compensation should reflect that
fact. He said our answer is clear,
loud and unequivocable. Tesla is better with Elon.
Tesla is Elon. That's what Ron Baron said.
Yet some investors have become delusioned with Musk amid
Tesla's performance struggles. Leo Coogan, one of Tesla's
largest individual shareholders, stated the that he'd vote
against the proposal, saying enough is enough.
A coalition of seven large institutional investors,
including the New York City Comptroller and Amalgamated
Bank, has urged shareholders to reject the package, setting a
material governance failure. Now proxy advisory firm ISS
criticized the package as excessive despite Tesla's
success, Downing it would increase Musk's focus at Tesla
at all. Marcy Frost, CEO of the
California Public Employees Retirement System, representing
2.2 million public workers, also plans to vote against the
package, as it did back in 2018 as well.
Now, Frost said that the decision wasn't personal, but
about ensuring returns for shareholders of Tesla.
Frost also said it's really important then as a shareholder
that we get the return on the capital that were allocated to
these public companies. James Park, who was a UCLA
School of Law professor, indicated a vote for the
proposal would signal shareholders desire from Musk's
continued involvement, while a Novo would reflect
dissatisfaction within its leadership now.
Denhams later highlighted Musk's role in Tesla's growth over the
past six years and stressed the importance of the pay package by
retaining his attention and motivation, she wrote.
If Tesla is to retain Eli's attention and motivate him to
continue to devote his time, energy, ambition, and vision to
deliver comparable results in the future, he must stand by our
deal now. In January, Musk tweeted about
his need for more control over Tesla.
He said I am uncomfortable growing Tesla to be a leader in
AI and robotics without having about 25% voting control.
Enough to be influential, but not so much that I can't be
overturned. Both Musk and Tesla decided to
decline for comment on this matter to us today.
Now. This vote occurs as Tesla
grapples with a significant drop in stock value, having lost more
than 30% since the year start. The company reported a 55%
plunge in first quarter profits in April due to slowing sales.
And to ease investors worries, Musk promised to launch a fully
autonomous robo taxi by August, a timeline which has met with
skepticism considering full self driving isn't quite a thing yet
now. Park noted that the current
economic backdrop would influence voters decisions.
He suggested that some retail investors dedicated to Musk
might overlook recent events and vote in favor of the package,
while others might be disillusioned by Tesla's recent
performance. Analyst Adam Jonas warned that
rejecting Musk's pay package could slow down Tesla's AI
efforts. Some investors are willing to
take that risk. Nell Minow, vice chair of Value
Edge Advisors, donated most of her Tesla stock to charity after
voting against the pay package. She criticized Tesla's corporate
governance, saying there's no way you can consider this board
independent. If he doesn't have enough of an
incentive from his current holdings, then I don't know if
this gigantic amount of money would make a difference.
Kevin Smith, who's and software engineer with a few Tesla
shares, was frustrated and he said it seems to be a symbolic
gesture against the court. So my symbolic vote is no.
This vote will determine Musk's future role at Tesla and could
influence the company's direction amid ongoing
challenges. Though investors must weigh
Musk's potential departure against his leadership
contributions and Tesla's needs. The decision will shape Tesla's
path forward in the competitive EV market and AI in the future.
Like as we have noticed from Elon lately, he has been stating
that if you think Tesla is a car company, you've got it all
wrong. Tesla is a technology company
that just so happens to build the best car and they're making
AI, they're making robots, solar roofs, power everything.
So without Elon at the helm to lead things, where would the
company go? That's where I'm going to give
my thoughts on this now. I'm a person that doesn't like
corporate green. I don't like billionaires that
don't give back. Elon has given back numerous
times. He pays his taxes, things like
that. He's doing OK.
Well in that regard. In my opinion, he's doing all
right now. I'm a big fan of SpaceX.
If you haven't noticed, I love talking about SpaceX and
Starship. It's one of the things that I
really enjoy doing. I know he focuses a lot of time
at SpaceX due to the Starship program, but he did put some
people in place there to take over when he's not available.
So Gwynn Shotwell, of course, and Kathy Leaders, like Kathy
Leaders is one of the people that used to run the human
spaceflight for NASA and now she runs the Starship factory down
in Texas. So he put some leaders in place
to take over the things that he used to do.
He basically helped build that factory from the ground up down
in South Texas. Now, Elon does have people at
Tesla that work really closely with them and do jobs that he
doesn't do, but he's the visionary.
So think about that. I'm I'm a big supporter of the
things that Elon wants to get done.
Build robots, build a rocket, then go to Mars.
The Boring Company is very cool. I think it's a really cool idea
to have tunnels where there's congested traffic or where you
just need to go a couple miles and you don't want to sit at red
lights for a while or you don't want to get an Uber or whatever.
Just go into the tunnel. That's really neat.
The cyber truck's pretty cool. I really enjoy all the Tesla
vehicles. They're very fun to drive.
I've driven them, driven them Model S and a few others.
But if, if it seems like in this regard, and I want to know about
this in the comments, it seems like Elon is threatening
shareholders almost. I wouldn't say blackmailing
them, but he he said that if he doesn't have 25% of the company,
his heart's not in it anymore. He just can't get up in the
morning to go to work. He expressed that there were,
you know, if he doesn't have 25% voting control, He said, I'm
uncomfortable growing Tesla to be a leader in AI and robotics
without having 25% voting control, enough to be
influential, but not so much that I can't be overturned.
So 25% of Tesla is going to make him a lot of money in the future
and he made the company so it could be controlled by the
shareholders. And if he has 25% control, they
could overturn him if enough people vote against him.
And it's just like his pay package.
Now, do I think that the pay package is legit 2018?
Now, you got to remember the board of directors at that time
were basically Elon's friends. You know, I'm just going to put
it straight out there. His brother, his friends, people
he was very close with were on the board at that point.
In 2018, they came up with this package.
So Elon would stay the visionary and he would stay with the
company. And at that point, it seemed
like a great idea because SpaceX was growing, Tesla was growing,
other companies were growing. And at this point, he needed to
have control over Tesla. He needed to make money.
And since he wanted to make some more money, he wanted us more
control in the future. Billions of dollars, 10s of
billions of dollars in the future.
It makes sense, $56 billion is a lot of money.
But they didn't know it was going to grow to this point.
And he did everything he needed to do in order to get that pay
package. And if the board of directors
said that it was OK and the other members thought it was all
right, I don't see why he shouldn't have the money.
So some people have commented on this channel about that.
I'm something I got. I got this crazy comment the
other day from somebody and say that I said that I'm a left wing
Democrat shill or something with the mind virus or something.
Dude, I'm going to say this straight up to you who haven't
read that comment. I read it and I laughed at you.
You're spitting out this rhetoric.
That's weird. I just tell you how it's going.
What's going on, by the way? I'm being honest with you guys.
I know I'm like, if you, if you listen to this podcast, I don't
usually go off on tangents like this.
I usually read the news to you and I tell you what's going on
and then I log off. And then we can go out about our
days, right? About 10 minutes of Elon Musk
news. But the fact is you have to look
at all points of data for things like this, and I skewed towards
both sides on this one. It's a really tough decision
because the guy did everything he was supposed to do.
He had all the numbers he was supposed to hit.
And if you don't pay the guy for doing his job, then what kind of
message does that send? I don't know.
Do you think he's worth $56 billion?
Is that is that too much money for one person to have And also
if he's saying that he has if he the 25% influence on Tesla and
if he doesn't get it, well, I can't I can't keep doing my job.
That seems kind of weird to me. I want to know what you think in
the comments. If you're on Spotify, please hit
the follow button and leave a comment down below or any other
podcast platform that you can leave comments on, including
YouTube. Please let me know what you
think about this because this is a weird, it's a, it's a tough
one. And we're going to know on
Thursday what's happening to Elon and his control.
And if he doesn't get the 25% control and if they don't give
him the pay package and if they don't move to Texas, he's going
to flip out 100%. Elon's going to flip out.
We'll hear about it on X. He's going to throw a tantrum.
Sometimes Elon goes a little bit wild.
He's a genius. He's an absolute genius and I
will never take that away from him.
He's done incredible work so far and he has incredible ideas.
But I believe if he doesn't get what he wants, it's kind of
going to be like a spoiled brat, you know?
And I put understand why if he doesn't have 25% voting control
of his company that he was, he helped start and helped grow to
what it is now, I can understand where he's coming from.
I can understand why if he doesn't get his money, I can
understand where he's coming from because don't mess with
somebody's money. Don't mess with somebody's
company or their family. And those two things, the
company and the money, everyone's messing with them
right now. So if he doesn't get his 25%, I
think we're going to hear about it pretty, pretty legit on X
after this. So again, let me know in the
comments. I appreciate everybody sticking
with me on this one. I'm going to do more of these
podcasts where I speak my mind a little bit more.
I think it's important that we all have a conversation here and
we're all part of this together this whole show.
So I'm going to continue doing the news for you.
I won't be slanted with it. Eileen Middle.
I'm right in the middle. I look at all the data.
Sometimes some of these things are, you know, some of the news
is a little bit off. You know, it's it try to do it
right down the middle and sometimes it's a little bit
left, sometimes a little right, whatever.
Try to do it as center as possible.
But I thought it was funny that somebody said I have a mind
virus. Like that's, that's a weird
thing to say, a mind virus. Oh my God.
Anyway, thank you. The guy who said this, a mind
virus. I know you still listen so you
know who you are and I'm not laughing at you, but maybe
you're the one with the mind virus.
I'm just joking. I really, I really do wish you
the best and I'll catch you guys in the next one.
Take care of yourselves and each other and make sure to subscribe
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