Elon Musk’s Bold Salary Proposal
Who wouldn’t want to be a millionaire, right? Elon Musk certainly seems to believe he deserves that title. He recently expressed that those who criticize his quest for a $1 trillion salary package are nothing short of “corporate terrorists.”
During the end of Tesla’s most recent earnings call, Musk took the opportunity to advocate for his significant pay plan, dismissing opposing advice from advisory firms as “stupid.”
This substantial pay package hinges on Musk achieving certain benchmarks, potentially increasing his ownership in the company from 13% to as much as 29%.
“You need enough voting control to wield substantial influence, but not so much that you can’t be dismissed if things go awry,” Musk remarked, interrupting the chief financial officer toward the close of an hour-long call. A report from Bloomberg noted his remarks.
Musk labeled proxy advisory firms like Institutional Shareholder Services and Glass Lewis as “corporate terrorists,” criticizing them for asking shareholders to reject his compensation plan.
“I would hate to build a massive workforce of robots and then be removed because of some poor recommendations from ISS and Glass Lewis, who don’t really understand our situation,” he expressed passionately.
ISS voiced “unabated concerns” regarding the ability to adjust future compensation, while Glass Lewis cautioned that the proposal could dilute other investors’ shares in the company.
As the world’s wealthiest person, with a net worth estimated at $487.5 billion by Forbes, Musk emphasizes that gaining strong voting rights is crucial to his plan.
Following Musk’s comments, Tesla CFO Vaibhav Taneja commended the special board committee for their efforts in shaping the proposal.
“Shareholders won’t see anything until they benefit significantly,” Taneja clarified.
This intense dialogue capped off a rather disappointing earnings call where despite record sales, Tesla fell short of profit predictions.
Musk’s proposed compensation structure spans ten years and links his payout to ambitious milestones, such as selling 20 million cars, delivering 1 million humanoid robots, and ballooning Tesla’s market value to a staggering $8.5 trillion.
A proxy filing from last month revealed that Musk warned Tesla’s board he may leave the electric vehicle manufacturer for “other interests” unless he secured at least 25% of the voting rights and received appropriate compensation for his previous contributions.
Shareholders are slated to vote on the compensation plan during Tesla’s annual meeting in Austin on November 6.
Wedbush Securities analyst Dan Ives stated that he anticipates the proposal will receive overwhelming approval despite some pushback, as many believe it’s crucial to keep Musk as a “wartime CEO.”
Meanwhile, Tesla reported a 40% decline in operating profit for the third quarter, alongside over $400 million in tariff-related expenses, resulting in operating costs soaring by 50% to $3.4 billion.
On Thursday morning, Tesla’s stock saw a dip of 3.8%, though it has risen 11.1% since the year’s start.
