Elon Musk Lobbies on X for His $46.5 Billion Tesla Pay Package


Elon Musk, Tesla’s chief executive, offered a personal tour of the electric carmaker’s factory in Austin, Texas, to select shareholders this week.

“Please let us know if you have any questions about voting your Tesla shares!” Mr. Musk wrote on X, the social media platform he owns.

It was just one of at least a dozen posts that Mr. Musk has published on X in recent weeks as Tesla’s shareholders have been voting on a $46.5 billion pay package for him.

To encourage approval of the package, Mr. Musk has shared on X a sizzle reel of Tesla’s vehicles speeding through deserts at dusk. He has said he needs enough shares in the company to maintain control over it, especially as it ramps up its artificial intelligence efforts. And he has lashed out at investors who have said they will oppose his pay.

“Thanks to all Tesla vote supporters!” Mr. Musk wrote in a post on May 16, following up two days later with: “Shareholders have the right to vote their shares!” On Thursday, he said shareholders who voted against him were “oathbreakers.”

The messages on X underline how crucial the pay package is for Mr. Musk after a Delaware judge voided it in January. The judge ruled in favor of a dissident shareholder who had sued Tesla, claiming Mr. Musk’s compensation was excessive.

Now Tesla is campaigning to get shareholders to reapprove the pay for Mr. Musk, who has helped build the company into the most valuable automaker in the world. Tesla has been posting on his behalf, too, and the company’s board has publicly supported Mr. Musk’s campaign, saying his performance merits the compensation.

Mr. Musk has turned to his platform of choice, X, to make his case. It’s part of his pattern of increasingly using X to benefit his other companies. In some cases, he has posted support for right-wing heads of state, who have later helped secure advantages for Tesla, including lower tariffs and access to important materials. He also uses the site to market milestones at SpaceX, his rocket company, and the introduction of new vehicles at Tesla to his 185 million followers.

Mr. Musk’s use of X is “a benefit and a curse at the same time,” said Eric Talley, a professor at Columbia Law School. “X is a good way to rally the troops.” But, he added, “you want to have a lawyer making sure he isn’t screwing up his own case.”

Mr. Musk’s posts on X about his Tesla pay package most likely don’t run afoul of the law as long as he isn’t misleading shareholders, corporate governance experts said. But threats like one he posted in January about pursuing robotics and artificial intelligence ventures outside Tesla unless he got 25 percent of the company’s voting shares could be problematic, they added.

In response to a request for comment, a representative for Tesla’s board referred to a post in which Mr. Musk said he didn’t need the money but wanted enough control to ensure that artificial intelligence was handled responsibly. Mr. Musk did not respond to a request for comment, and X declined to comment.

Tesla’s board chair, Robyn Denholm, has posted to a company-backed website advocating for his pay package. “Elon delivered the type of growth that most thought was impossible, and he has created tremendous value for you, the owners of the company,” she wrote.

Tesla’s shareholders first voted on Mr. Musk’s pay package in 2018, approving a plan to grant him an additional 12 percent stake in the company over a dozen years and making him the highest-paid executive in the country. Tesla was valued at $560.2 billion as of the market close on Thursday, and Mr. Musk controls 20.5 percent of it, according to Securities and Exchange Commission filings. (That figure includes shares that have been voided by the Delaware court, and that Tesla is seeking to restore. Without those, his stake is about 13 percent.)

Mr. Musk draws no salary from Tesla. To earn the payouts in company stock, he had to complete ambitious growth milestones at the company.

But Kathaleen McCormick, a judge at the Delaware Chancery Court overseeing the dissident shareholder lawsuit, nullified the pay package, ruling that Mr. Musk held near-total sway over Tesla’s board and essentially approved his own compensation without proper fiduciary management. The judge also ordered him to return his excess pay to Tesla.

In April, Tesla asked shareholders to reapprove Mr. Musk’s pay package. The result will be announced at the company’s annual meeting on June 13.

Mr. Musk often posts about Tesla on X, in part because the carmaker eschews more traditional marketing. He typically hosts splashy online events to debut vehicles or the company’s humanoid robots.

Some of his Tesla posts on X have landed him in trouble. In 2018, the S.E.C. fined Mr. Musk $20 million for claiming on the platform, then known as Twitter, that he planned to take Tesla private at $420 per share. (Tesla paid a separate $20 million fine.) That price, for which he said he had “funding secured,” was 20 percent higher than where Tesla’s stocks were trading at the time. Regulators later said he had misled investors.

As part of his settlement with the S.E.C. in 2018 for the post, Mr. Musk was required to run his social media posts by a company lawyer if the statements contained material information about Tesla. He also stepped down as chairman of Tesla’s board.

Mr. Musk later tried to get out of the settlement, saying it infringed on his freedom of speech. But in 2022, a federal court denied the request. Mr. Musk appealed to the Supreme Court, which declined in April to hear the case.

The S.E.C. declined to comment on Mr. Musk’s public campaign for his pay.

It’s unclear whether the pay package will pass. Some institutional investment firms, like Nordea Asset Management, have come out against the pay package in recent weeks. Tesla shares have fallen about 28 percent this year, and the company is behind schedule on releasing new models. Tesla has also been losing customers to electric carmakers in China.

“Even as Tesla’s performance is floundering, the board has yet to ensure that Tesla has a full-time C.E.O. who is adequately focused on the long-term sustainable success of our company,” a group of institutional investors wrote to shareholders this month. The investor representatives included New York City’s comptroller, Brad Lander, who oversees the city’s pension fund.

Glass Lewis, a proxy advisory firm that consults with institutional investors about how to vote their shares, recommended this week that Tesla shareholders reject Mr. Musk’s package. The firm said that his already sizable ownership in Tesla gave him an incentivize to perform well, and that granting him more shares would dilute the stake of other shareholders.

Glass Lewis opinions are influential with large asset managers, which in Tesla’s case include Vanguard and BlackRock. CalPERS, the California pension fund, also said it would vote against the compensation package.

“Shame on them, they have no honor,” Mr. Musk posted in response on Wednesday.

The chances the pay measure will pass suffered another blow Friday when Institutional Shareholder Services, which also advises institutional investors, recommended against approval.

Even if Tesla’s shareholders vote to reinstate Mr. Musk’s pay, they are unlikely to get final say, legal experts said. The Delaware judge will still need to decide whether the vote is sufficient to reinstate his pay, and the ruling is likely to be appealed.

To survive legal challenges, the pay package needs approval by investors representing more than 50 percent of voting shares not belonging to Mr. Musk or his brother, Kimbal Musk.

Paul Regan, an associate professor at Widener University Delaware Law School, said of Tesla’s board: “This thing may end up not going the way they think.”

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