Ahead of Tesla's annual general meeting (AGM) on Thursday, the electric vehicle manufacturer is making a significant pitch to shareholders: Elon Musk is worth $1 trillion.
In preparation for this pivotal meeting in Austin, Texas, Tesla has rolled out digital advertisements to support Musk's controversial compensation package. Features on Votetesla.com have included endorsements from board members, designed to sway shareholder opinions in his favor.
However, the sentiment among shareholders appears divided, with the meeting likely to turn into a referendum on Musk's leadership. He recently scrutinized Tesla's future on social media, suggesting the stakes are not just high for the company but could affect the future of civilization itself.
Despite vocal supporters, including prominent figures like Dell Technologies' Michael Dell and Cathie Wood, the enthusiasm is not universal. Critics argue that focusing on Musk's pay during a time when company sales are declining reflects a broader misalignment in Tesla's priorities. Observers like Ross Gerber, CEO of Gerber Kawasaki, expressed skepticism: A company struggling to sell cars spends money on advertising to sell a pay package?
The Trillion Dollar Man
The proposed pay structure does not suggest a direct salary of $1 trillion. Instead, it establishes ambitious financial targets, specifically raising Tesla's market value from $1.4 trillion to $8.5 trillion and significantly expanding the company’s fleet of Robo-taxis. Achieving these goals could grant Musk 423.7 million new shares, valued at close to $1 trillion at the new target.
This is not the first time Musk's compensation has faced scrutiny. A previous package, conditioned upon substantial increases in Tesla's market valuation, faced legal challenges due to concerns over board governance.
A Polarizing Figure
Tesla is positioning Musk’s leadership as critical for its future, arguing he uniquely embodies the qualities necessary to fulfill its long-term vision. Yet, both proxy advisory firms and major investors, including Norway’s sovereign wealth fund and CalPERS, have voiced opposition, asserting the proposed pay package is excessive and could harm shareholder value.
As protests against Musk’s leadership continue nationwide, the question remains: can Elon Musk's track record convince shareholders to back his ambitious pay proposal at the AGM? With mounting pressure from critics, the vote could potentially mark a significant turning point in Tesla's corporate governance and future trajectory.
