{"id":101971,"date":"2025-11-05T03:56:00","date_gmt":"2025-11-05T03:56:00","guid":{"rendered":"https:\/\/sotnews.agency\/?p=101971"},"modified":"2025-11-05T03:56:00","modified_gmt":"2025-11-05T03:56:00","slug":"tesla-says-musk-should-be-paid-1tn-will-shareholders-agree","status":"publish","type":"post","link":"https:\/\/sotnews.agency\/?p=101971","title":{"rendered":"Tesla says Musk should be paid $1tn \u2013 will shareholders agree?"},"content":{"rendered":"
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Ahead of Tesla\u2019s annual general meeting (AGM) on Thursday, there\u2019s been one key message the electric car-maker has been hammering home to shareholders: the boss is worth $1tn.<\/p>\n

It has taken out digital ads to make the case for Elon Musk\u2019s proposed bumper pay package, while Votetesla.com features a video of board chair Robyn Denholm and director Kathleen Wilson-Thompson praising him, as triumphant music crescendos in the background.<\/p>\n

It\u2019s not clear that everyone is singing from the same hymn sheet, though, meaning the AGM in Austin, Texas, is set to become a referendum on Musk himself, after a rightward political turn which has made him one of the most polarising chief executives in recent memory.<\/p>\n

Musk himself has taken to X \u2013 which he owns \u2013 to raise the stakes higher still, saying the fate of Tesla \u201ccould affect the future of civilisation.\u201d<\/p>\n

He\u2019s also used his social media megaphone to amplify some of the deal\u2019s high-profile backers, including Dell Technologies\u2019 Michael Dell, Ark Invest CEO Cathie Wood, and his brother, Kimbal, who sits on the Tesla board.<\/p>\n

\u201cThere is no one remotely close to my brother,\u201d Kimbal said, extolling his sibling\u2019s leadership qualities.<\/p>\n

\u201cThanks, bro ,\u201d Musk replied.<\/p>\n

Not everyone agrees.<\/p>\n

For some, the focus on Musk and the soap opera around his pay is symptomatic of how the car firm \u2013\u00a0which has seen sales slide, has lost its way under his leadership.<\/p>\n

\u201cWhat\u2019s amazing to me is a company struggling to sell cars spends money on advertising to sell a pay package,\u201d said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management.<\/p>\n

Mr Gerber has pared back his Tesla holdings in recent years \u2013 and turned up his criticism of the direction it\u2019s heading in.<\/p>\n

\u201c[Tesla] needs to change the focus of the company back to its core \u2013 to selling EVs again,\u201d he said.<\/p>\n

The trillion-dollar man<\/h2>\n

The deal Tesla wants shareholders to back is not a salary of one followed by 12 zero.<\/p>\n

Instead, it sets Musk the target of raising Tesla\u2019s market value to $8.5 trillion, from $1.4 trillion at the time of writing.<\/p>\n

He would also have to oversee a massive boom in the company\u2019s self-driving \u201cRobotaxi\u201d cars, getting a million of them into commercial operation \u2013 no small deal given their\u00a0underwhelming launch.<\/p>\n

Do that, among meeting other benchmarks, and Musk would be given 423.7 million new shares, which would be worth nearly $1tn if the target valuation is reached.<\/p>\n

Tesla did not respond to the BBC\u2019s requests for comment about its strategy to garner support from shareholders.<\/p>\n

Of course, this is not the first pay controversy Musk and Tesla have become embroiled in.<\/p>\n

Previously, Tesla got shareholders to twice ratify a pay package for Mr Musk that was worth tens of billions of dollars if he achieved a tenfold increase in Tesla\u2019s market value.<\/p>\n

He met that milestone but, in 2024, a Delaware judge\u00a0rejected the deal\u00a0on the grounds that Tesla\u2019s board members were too personally and financially enmeshed with the company\u2019s boss.<\/p>\n

The Delaware Supreme Court is reviewing that decision \u2013 even as deliberations continue over this even larger pay package.<\/p>\n

\u201cThe strategy is more of the same from Tesla, which is not to say that this is normal. Nothing about Tesla is normal,\u201d Dorothy Lund, a professor at Columbia Law School told BBC News.<\/p>\n

\u201cThey\u2019re not a poster child for good corporate governance.\u201d<\/p>\n

Professor Lund said get-out-the-vote campaigns like this sometimes take place when a company is worried, for example. about an activist shareholder forcing significant changes to how it operates, such as who is on its board of directors.<\/p>\n

\u201c[But] never in my life have I seen something like that happen in the context of a compensation decision,\u201d Professor Lund said.<\/p>\n

And unlike the vote on that earlier compensation package, Elon and Kimbal Musk will both get to vote as they push to reach the majority threshold required to seal the deal.<\/p>\n

Mr Musk is already the world\u2019s richest man,\u00a0becoming\u00a0the first known half-trillionaire earlier this year.<\/p>\n

Anti-Musk and Tesla protests have happened in cities across the US<\/figcaption><\/figure>\n

A polarising figure<\/h2>\n

Tesla\u2019s argument in support of the pay package rests on the idea that Musk might leave the company if shareholders don\u2019t follow the board\u2019s recommendation and approve the pay package.<\/p>\n

It says it can\u2019t afford to lose him, and that he \u201csingularly possesses the leadership characteristics necessary to\u2026 realise its long-term mission\u201d.<\/p>\n

In the video posted to votetesla.com, Ms Wilson-Thompson said the board undertook a seven-month process using legal and compensation experts to devise the compensation deal.<\/p>\n

On last month\u2019s earnings call, Musk minimised the focus on the payout, saying the real issue was ensuring he had adequate control in order to properly steer Tesla.<\/p>\n

But \u2013 aside from the question of whether Musk, with his preoccupations with autonomous cars and humanoid robots, is setting the right course \u2013 there is also the matter of whether championing the boss is the board\u2019s job.<\/p>\n

\u201cThe role of a board is to have fiduciary responsibility to shareholders and not to be advocating for a CEO,\u201d said Yale School of the Environment\u2019s Matthew Kotchen, an economics professor who\u00a0co-authored a recent study\u00a0attempting to quantify damage Mr Musk has done to Tesla of late.<\/p>\n

It\u2019s clear a number of key decision-makers are unpersuaded that the deal represents value for money.<\/p>\n

Proxy advisers Glass Lewis and Institutional Shareholder Services (ISS), which advise asset managers on how to vote on major corporate proposals, have recommended investors reject the pay package, saying it\u2019s excessive and would dilute shareholder value.<\/p>\n

Norway\u2019s sovereign wealth fund, the world\u2019s largest national wealth fund, has followed suit, as has the largest public pension fund in the US, CalPERS.<\/p>\n

New York State Comptroller Thomas DiNapoli has\u00a0urged investors\u00a0to also reject directors up for re-election to the board, saying they\u2019ve failed \u201cto provide independent oversight and accountability.\u201d<\/p>\n

As some institutions baulk, that might leave Mr Musk more reliant on Tesla\u2019s unusually large volume of retail investors \u2013 who tend to support him \u2013 to get his wish.<\/p>\n

It all means, in\u00a0the words of Morgan Stanley analyst\u00a0Adam Jonas, that Thursday\u2019s vote is set to be one of \u201cthe most important events\u201d in Tesla\u2019s history, with a \u201cdistinct possibility\u201d the pay package won\u2019t pass.<\/p>\n

It doesn\u2019t help Musk\u2019s cause that protesters continue to organise anti-Tesla rallies, months after his controversial turn as US President Donald Trump\u2019s government efficiency tsar\u00a0crashed and burned in May.<\/p>\n

\u201cIt\u2019s hard for me to imagine that Elon Musk, in the very near term, shakes off the damage that he\u2019s done to this brand,\u201d said Mr Kotchen.<\/p>\n

Others though, would say Musk\u2019s extraordinary track record of entrepreneurship would make it unwise to bet against him, even when the sum being staked is as dizzyingly high as $1tn.<\/p>\n

\u201cIt\u2019s hard to deny that Elon Musk\u2019s larger-than-life personality has helped drive more interest and awareness for his organisation than almost any other corporate leader in the modern era,\u201d said Edmunds\u2019 head of insights Jessica Caldwell.<\/p>\n

\u201cHe\u2019s become a more polarising figure over time, but there\u2019s still a belief in his ability to deliver on bold, unconventional ideas,\u201d she added.<\/p>\n

The trillion-dollar question now is \u2013 do Tesla shareholders agree?<\/p>\n<\/div>\n

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\"TeslaAhead of Tesla’s annual general meeting (AGM) on Thursday, there’s been one key message the electric car-maker has been hammering home to shareholders: the boss is worth $1tn.<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_2277560469115098_106292521332774":"","twitter_aToxNzczMzI3Njk4OTg4ODUxMjAxOw==_1773327698988851200":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2077,117,10,9,5468],"tags":[],"class_list":["post-101971","post","type-post","status-publish","format-standard","hentry","category-elon-musk","category-news","category-politics","category-popular","category-tesla"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/posts\/101971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=101971"}],"version-history":[{"count":0,"href":"https:\/\/sotnews.agency\/index.php?rest_route=\/wp\/v2\/posts\/101971\/revisions"}],"wp:attachment":[{"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=101971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=101971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sotnews.agency\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=101971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}