Latest / Elon Musk Podcast / Elon Musk persuades Tesla investors to restore his $50 billion pay package

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Elon Musk persuades Tesla investors to restore his $50 billion pay package · Elon Musk Podcast

• 0:01
  Hey, everybody. Welcome back to the Elon Musk
• 0:04
  Podcast. This is a show where we discuss
• 0:07
  the critical crossroads that shape SpaceX, Tesla X, The
• 0:11
  Boring Company and Neuralink. I'm your host, Will Walden.
• 0:15
  Today's episode revolves around the $56 billion compensation
• 0:20
  package for Elon Musk as the CEO of Tesla.
• 0:25
  Now Tesla investors are poised to vote on this pay package.
• 0:30
  This is the company's proposed relocation from Delaware to
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  Texas. And at an important shareholder
• 0:36
  meeting this week, analysts warn at the risk that must could
• 0:40
  leave Tesla to focus on other ventures such as his AI startup
• 0:45
  XAI, social media platform X. And that is if the pay package
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  is rejected. Remember, this is the largest
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  pay package for any CEO, anytime, ever in the history of
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  humanity. The voting on Musk's
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  controversial pay package is set to conclude on Thursday, with
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  major consequences for both Musk and Tesla.
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  And over recent weeks, Musk has actively campaigned to persuade
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  shareholders to reinstate his nearly $50 billion pay package,
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  which the Delaware judge who voided it described as the
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  largest ever observed in public markets.
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  Now, Tesla released a video featuring Optimus, which is Elon
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  Musk and Tesla's humanoid robot, instructing shareholders on how
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  to cast their ballots. Voters were offered a chance to
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  win a Musk escorted tour of Tesla's Gigafactory in Austin.
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  And Musk has been vocal on X, his social media platform, about
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  the vote predicting a win and claiming the public sentiment in
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  is unequivocally supportive. Now, as the vote approaches, the
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  outcome remains uncertain. Major shareholders are divided
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  on whether Musk, often seen as a distracted leader, deserves such
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  a substantial reward. The final decision may rest on
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  individual investors, many of whom are drawn to Musk's public
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  persona as a genius. Now.
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  The vote has broad implications for Tesla, though, which has
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  faced challenges such as weak sales, global competition and
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  mass layoffs. And Musk has indicated he might
• 2:17
  leave Tesla if the pay package is denied, potentially pursuing
• 2:22
  advanced technology projects elsewhere.
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  He's threatening people. And if approved, Musk would gain
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  more control over Tesla's board through stock options.
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  Now, Tesla Chairperson Robin Denholm has urged investors to
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  support Musk, emphasizing his unique contributions to the
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  company. He said Elon's unique
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  contributions have built Tesla from a company that was in 2018,
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  a loss making ambitious company with significant hurdles and
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  challenges to overcome into what it is today, a company that is
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  literally changing the world. However, critics like New York
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  City Comptroller Brad Lander argue that the package is
• 3:01
  unreasonable given Tesla's struggles and Musk's divided
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  focus among various ventures. He said we need a full time CEO
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  who's focused on growing the company and producing great
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  shareholder returns, not allowing for a distraction or
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  chasing shiny new objects. Now.
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  In 2018, a majority of Tesla shareholders approved Musk
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  compensation package worth $56 billion in stock options instead
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  of a salary. This propelled Musk to become
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  the world's richest person, funding his ventures into space.
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  Brain Digitization and acquiring Twitter's de facto town square.
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  However, some shareholders sued, claiming the process was
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  improper. Now earlier this year, a
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  Delaware judge invalidated the pay package, calling it an
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  unfathomable sum and noting that it was approved by a board
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  filled with Musk's friends and a former divorce lawyer.
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  The board now asked shareholders to restore the package, which
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  would increase Musk's voting power to nearly 25% and
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  authorized Tesla's corporate move to the state of Texas.
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  Now, the votes outcome is uncertain, with some key
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  investors opposing the package and others remaining silent.
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  Major institutional investors like Vanguard Group, BlackRock
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  and State Street Corp, holding about 17% of Tesla stock
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  collectively, have not publicly declared their positions.
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  None responded to our requests for comment.
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  At this point. Now about 40% of Tesla's stock
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  is held by non institutional investors, including individual
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  retail investors. And many are Musk supporters,
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  such as billionaire Ron Baron, who called Musk indispensable to
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  Tesla and asserted that his compensation should reflect that
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  fact. He said our answer is clear,
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  loud and unequivocable. Tesla is better with Elon.
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  Tesla is Elon. That's what Ron Baron said.
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  Yet some investors have become delusioned with Musk amid
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  Tesla's performance struggles. Leo Coogan, one of Tesla's
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  largest individual shareholders, stated the that he'd vote
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  against the proposal, saying enough is enough.
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  A coalition of seven large institutional investors,
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  including the New York City Comptroller and Amalgamated
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  Bank, has urged shareholders to reject the package, setting a
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  material governance failure. Now proxy advisory firm ISS
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  criticized the package as excessive despite Tesla's
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  success, Downing it would increase Musk's focus at Tesla
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  at all. Marcy Frost, CEO of the
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  California Public Employees Retirement System, representing
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  2.2 million public workers, also plans to vote against the
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  package, as it did back in 2018 as well.
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  Now, Frost said that the decision wasn't personal, but
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  about ensuring returns for shareholders of Tesla.
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  Frost also said it's really important then as a shareholder
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  that we get the return on the capital that were allocated to
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  these public companies. James Park, who was a UCLA
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  School of Law professor, indicated a vote for the
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  proposal would signal shareholders desire from Musk's
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  continued involvement, while a Novo would reflect
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  dissatisfaction within its leadership now.
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  Denhams later highlighted Musk's role in Tesla's growth over the
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  past six years and stressed the importance of the pay package by
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  retaining his attention and motivation, she wrote.
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  If Tesla is to retain Eli's attention and motivate him to
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  continue to devote his time, energy, ambition, and vision to
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  deliver comparable results in the future, he must stand by our
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  deal now. In January, Musk tweeted about
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  his need for more control over Tesla.
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  He said I am uncomfortable growing Tesla to be a leader in
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  AI and robotics without having about 25% voting control.
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  Enough to be influential, but not so much that I can't be
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  overturned. Both Musk and Tesla decided to
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  decline for comment on this matter to us today.
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  Now. This vote occurs as Tesla
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  grapples with a significant drop in stock value, having lost more
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  than 30% since the year start. The company reported a 55%
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  plunge in first quarter profits in April due to slowing sales.
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  And to ease investors worries, Musk promised to launch a fully
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  autonomous robo taxi by August, a timeline which has met with
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  skepticism considering full self driving isn't quite a thing yet
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  now. Park noted that the current
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  economic backdrop would influence voters decisions.
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  He suggested that some retail investors dedicated to Musk
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  might overlook recent events and vote in favor of the package,
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  while others might be disillusioned by Tesla's recent
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  performance. Analyst Adam Jonas warned that
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  rejecting Musk's pay package could slow down Tesla's AI
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  efforts. Some investors are willing to
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  take that risk. Nell Minow, vice chair of Value
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  Edge Advisors, donated most of her Tesla stock to charity after
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  voting against the pay package. She criticized Tesla's corporate
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  governance, saying there's no way you can consider this board
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  independent. If he doesn't have enough of an
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  incentive from his current holdings, then I don't know if
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  this gigantic amount of money would make a difference.
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  Kevin Smith, who's and software engineer with a few Tesla
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  shares, was frustrated and he said it seems to be a symbolic
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  gesture against the court. So my symbolic vote is no.
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  This vote will determine Musk's future role at Tesla and could
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  influence the company's direction amid ongoing
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  challenges. Though investors must weigh
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  Musk's potential departure against his leadership
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  contributions and Tesla's needs. The decision will shape Tesla's
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  path forward in the competitive EV market and AI in the future.
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  Like as we have noticed from Elon lately, he has been stating
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  that if you think Tesla is a car company, you've got it all
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  wrong. Tesla is a technology company
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  that just so happens to build the best car and they're making
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  AI, they're making robots, solar roofs, power everything.
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  So without Elon at the helm to lead things, where would the
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  company go? That's where I'm going to give
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  my thoughts on this now. I'm a person that doesn't like
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  corporate green. I don't like billionaires that
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  don't give back. Elon has given back numerous
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  times. He pays his taxes, things like
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  that. He's doing OK.
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  Well in that regard. In my opinion, he's doing all
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  right now. I'm a big fan of SpaceX.
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  If you haven't noticed, I love talking about SpaceX and
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  Starship. It's one of the things that I
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  really enjoy doing. I know he focuses a lot of time
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  at SpaceX due to the Starship program, but he did put some
• 9:51
  people in place there to take over when he's not available.
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  So Gwynn Shotwell, of course, and Kathy Leaders, like Kathy
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  Leaders is one of the people that used to run the human
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  spaceflight for NASA and now she runs the Starship factory down
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  in Texas. So he put some leaders in place
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  to take over the things that he used to do.
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  He basically helped build that factory from the ground up down
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  in South Texas. Now, Elon does have people at
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  Tesla that work really closely with them and do jobs that he
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  doesn't do, but he's the visionary.
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  So think about that. I'm I'm a big supporter of the
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  things that Elon wants to get done.
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  Build robots, build a rocket, then go to Mars.
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  The Boring Company is very cool. I think it's a really cool idea
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  to have tunnels where there's congested traffic or where you
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  just need to go a couple miles and you don't want to sit at red
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  lights for a while or you don't want to get an Uber or whatever.
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  Just go into the tunnel. That's really neat.
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  The cyber truck's pretty cool. I really enjoy all the Tesla
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  vehicles. They're very fun to drive.
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  I've driven them, driven them Model S and a few others.
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  But if, if it seems like in this regard, and I want to know about
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  this in the comments, it seems like Elon is threatening
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  shareholders almost. I wouldn't say blackmailing
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  them, but he he said that if he doesn't have 25% of the company,
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  his heart's not in it anymore. He just can't get up in the
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  morning to go to work. He expressed that there were,
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  you know, if he doesn't have 25% voting control, He said, I'm
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  uncomfortable growing Tesla to be a leader in AI and robotics
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  without having 25% voting control, enough to be
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  influential, but not so much that I can't be overturned.
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  So 25% of Tesla is going to make him a lot of money in the future
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  and he made the company so it could be controlled by the
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  shareholders. And if he has 25% control, they
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  could overturn him if enough people vote against him.
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  And it's just like his pay package.
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  Now, do I think that the pay package is legit 2018?
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  Now, you got to remember the board of directors at that time
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  were basically Elon's friends. You know, I'm just going to put
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  it straight out there. His brother, his friends, people
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  he was very close with were on the board at that point.
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  In 2018, they came up with this package.
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  So Elon would stay the visionary and he would stay with the
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  company. And at that point, it seemed
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  like a great idea because SpaceX was growing, Tesla was growing,
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  other companies were growing. And at this point, he needed to
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  have control over Tesla. He needed to make money.
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  And since he wanted to make some more money, he wanted us more
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  control in the future. Billions of dollars, 10s of
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  billions of dollars in the future.
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  It makes sense, $56 billion is a lot of money.
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  But they didn't know it was going to grow to this point.
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  And he did everything he needed to do in order to get that pay
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  package. And if the board of directors
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  said that it was OK and the other members thought it was all
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  right, I don't see why he shouldn't have the money.
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  So some people have commented on this channel about that.
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  I'm something I got. I got this crazy comment the
• 13:24
  other day from somebody and say that I said that I'm a left wing
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  Democrat shill or something with the mind virus or something.
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  Dude, I'm going to say this straight up to you who haven't
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  read that comment. I read it and I laughed at you.
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  You're spitting out this rhetoric.
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  That's weird. I just tell you how it's going.
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  What's going on, by the way? I'm being honest with you guys.
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  I know I'm like, if you, if you listen to this podcast, I don't
• 13:50
  usually go off on tangents like this.
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  I usually read the news to you and I tell you what's going on
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  and then I log off. And then we can go out about our
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  days, right? About 10 minutes of Elon Musk
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  news. But the fact is you have to look
• 14:03
  at all points of data for things like this, and I skewed towards
• 14:10
  both sides on this one. It's a really tough decision
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  because the guy did everything he was supposed to do.
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  He had all the numbers he was supposed to hit.
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  And if you don't pay the guy for doing his job, then what kind of
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  message does that send? I don't know.
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  Do you think he's worth $56 billion?
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  Is that is that too much money for one person to have And also
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  if he's saying that he has if he the 25% influence on Tesla and
• 14:42
  if he doesn't get it, well, I can't I can't keep doing my job.
• 14:47
  That seems kind of weird to me. I want to know what you think in
• 14:50
  the comments. If you're on Spotify, please hit
• 14:54
  the follow button and leave a comment down below or any other
• 14:57
  podcast platform that you can leave comments on, including
• 15:00
  YouTube. Please let me know what you
• 15:02
  think about this because this is a weird, it's a, it's a tough
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  one. And we're going to know on
• 15:07
  Thursday what's happening to Elon and his control.
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  And if he doesn't get the 25% control and if they don't give
• 15:14
  him the pay package and if they don't move to Texas, he's going
• 15:18
  to flip out 100%. Elon's going to flip out.
• 15:20
  We'll hear about it on X. He's going to throw a tantrum.
• 15:24
  Sometimes Elon goes a little bit wild.
• 15:27
  He's a genius. He's an absolute genius and I
• 15:30
  will never take that away from him.
• 15:31
  He's done incredible work so far and he has incredible ideas.
• 15:36
  But I believe if he doesn't get what he wants, it's kind of
• 15:39
  going to be like a spoiled brat, you know?
• 15:41
  And I put understand why if he doesn't have 25% voting control
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  of his company that he was, he helped start and helped grow to
• 15:48
  what it is now, I can understand where he's coming from.
• 15:51
  I can understand why if he doesn't get his money, I can
• 15:53
  understand where he's coming from because don't mess with
• 15:56
  somebody's money. Don't mess with somebody's
• 15:58
  company or their family. And those two things, the
• 16:01
  company and the money, everyone's messing with them
• 16:05
  right now. So if he doesn't get his 25%, I
• 16:08
  think we're going to hear about it pretty, pretty legit on X
• 16:12
  after this. So again, let me know in the
• 16:16
  comments. I appreciate everybody sticking
• 16:18
  with me on this one. I'm going to do more of these
• 16:20
  podcasts where I speak my mind a little bit more.
• 16:22
  I think it's important that we all have a conversation here and
• 16:25
  we're all part of this together this whole show.
• 16:27
  So I'm going to continue doing the news for you.
• 16:30
  I won't be slanted with it. Eileen Middle.
• 16:34
  I'm right in the middle. I look at all the data.
• 16:36
  Sometimes some of these things are, you know, some of the news
• 16:39
  is a little bit off. You know, it's it try to do it
• 16:42
  right down the middle and sometimes it's a little bit
• 16:44
  left, sometimes a little right, whatever.
• 16:46
  Try to do it as center as possible.
• 16:48
  But I thought it was funny that somebody said I have a mind
• 16:50
  virus. Like that's, that's a weird
• 16:52
  thing to say, a mind virus. Oh my God.
• 16:58
  Anyway, thank you. The guy who said this, a mind
• 17:01
  virus. I know you still listen so you
• 17:02
  know who you are and I'm not laughing at you, but maybe
• 17:07
  you're the one with the mind virus.
• 17:10
  I'm just joking. I really, I really do wish you
• 17:12
  the best and I'll catch you guys in the next one.
• 17:16
  Take care of yourselves and each other and make sure to subscribe
• 17:20
  to the show if you haven't already on whatever podcast
• 17:22
  platform you're on right now. All right, take care.
• 17:25
  Bye bye. Hey, thank you so much for
• 17:33
  listening today. I really do appreciate your
• 17:35
  support. If you could take a second and
• 17:37
  hit the subscribe or the follow button on whatever podcast
• 17:40
  platform that you're listening on right now, I greatly
• 17:43
  appreciate it. It helps out the show
• 17:44
  tremendously and you'll never miss an episode.
• 17:47
  And each episode is about 10 minutes or less to get you
• 17:50
  caught up quickly. And please, if you want to
• 17:53
  support the show even more, go to patreon.com/stage Zero and
• 17:59
  please take care of yourselves and each other and I'll see you
• 18:02
  tomorrow.