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Elon Musk: "I Am Uncomfortable Growing Tesla To Be a Leader in AI & Robotics Without Having ~25% Voting Control" - Tesla Board, Give Him a New Compensation Package

Elon Musk has shared his view on needing a new compensation package to continue leading Tesla and growing it to multi-trillions of dollars in market cap. Tesla Board - give him a new compensation package.
Elon Musk: "I Am Uncomfortable Growing Tesla To Be a Leader in AI & Robotics Without Having ~25% Voting Control" - Tesla Board, Give Him a New Compensation Package

Elon Musk Shares His Stance On Needing A New Compensation Package

Elon Musk has shared his stance on needing a new compensation package. He said the following:

I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.

Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand that Tesla is not one startup, but a dozen. Simply look at the delta between what Tesla does and GM.

As for stock ownership itself being enough motivation, Fidelity and other own similar stakes to me. Why don’t they show up for work?

I proposed what this could look like in a previous article, with growth tranches through a 10 trillion market cap. The compensation plan would need to be such that its end goal gets Elon Musk to 25% ownership of Tesla. I think what I outlined does get him there, as it doubles his ownership from around 17% (ballpark guess of his existing shares) to 34%.

Giving Elon this compensation plan resolves his concern about him not having enough voting power in Tesla. He doesn't need full control, but needs to have enough to make a difference.

I looked up the Tesla board of directors online, and it seems to consist of these individuals:

  • Robyn Denholm, Chair
  • Elon Musk, CEO and Technoking
  • Ira Ehrenpreis
  • Kathleen Wilson-Thompson
  • James Murdoch
  • Andrew Baglino
  • Vaibhav Taneja
  • Joe Gebbia
  • Kimbal Musk
  • JB Straubel

This is according to Tesla's own IR website corporate page. These board members, of which Elon is one, have the power to introduce a new compensation package.

My question is - what is the hold up? Where is the communication on this? Why can't Tesla share something like this:

We have heard about Elon Musk needing a new compensation package, and we are having discussions right now on what this will be. This is a top priority for us.

That's all that the Board needs to communicate.

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Will Elon Musk Get a New Compensation Package?

I think a new compensation package will come if shareholders raise their voice. This includes those institutions like Fidelity who own many shares, but don't appear to be getting involved.

It will simply take pressure from shareholders to make it happen, otherwise, what motivation is there for the Board to vote for this in a unanimous way?

I am a VERY SMALL portion of Tesla shares owned. I own well under 1,000 shares, but own enough that if Tesla does well in the future, I should also do well.

Tesla Board - let's get Elon Musk a new compensation plan, so Tesla can continue to accelerate the world's transition to sustainable energy.

The views in this article are my own and my own opinions and don't reflect on anything or anyone else, except what I personally believe.

Also, Elon Musk further added context. He says 25% will give him enough control that Tesla can't be easily taken over by dubious interests. Here is what he said:

I should note that the Tesla board is great. The reason for no new “compensation plan” is that we are still waiting for a decision in my Delaware compensation case. The trial for that was held in 2022, but a verdict has yet to be made.

I put “compensation plan” in quotes, because, from my standpoint, this is primarily about ensuring the right amount of voting influence at Tesla.

If I have 25%, it means I am influential, but can be overridden if twice as many shareholders vote against me vs for me.

At 15% or lower, the for/against ratio to override me makes a takeover by dubious interests too easy. I would be fine with a dual class voting structure to achieve this, but am told it is impossible to achieve post-IPO in Delaware.

This could be because of the risk of AI, which Elon Musk has talked and warned about extensively. If he is in a position of control, he can oversee the growth of AI much more safely. There are many large institutions that own Tesla stock as Elon mentioned earlier - them having control of AGI may be what concerns Elon.

In Other Tesla News: Endless Stream of Tesla's Continuously Going Through Boring Tunnel Loop at Las Vegas

Do you think Elon Musk needs a new compensation plan? What is his reasoning to have 25%?

Share this article with friends and family and on social media - or leave a comment below. You can view my most recent articles here for further reading. I am also on X/Twitter where I post more than just articles daily, as well as LinkedIn! Thank you so much for your support!

Hi! I'm Jeremy Noel Johnson, and I am a Tesla investor and supporter and own a 2022 Model 3 RWD EV and I don't have range anxiety :). I enjoy bringing you breaking Tesla news as well as anything about Tesla or other EV companies I can find, like Aptera. Other interests of mine are AI, Tesla Energy and the Tesla Bot! You can follow me on X.COM or LinkedIn to stay in touch and follow my Tesla and EV news coverage.

Image Credit: Elon Musk Tweet

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