Shareholders first heard about the pay package in September when the board of directors proposed it in a detailed filing to federal securities regulators. The document, running 200 pages, also contains other proposals up for a vote at the meeting, including whether to allow Tesla to invest in another Musk company, xAI, and who should serve on the board in the future.
How Musk can get $US1 trillion
Musk won’t get necessarily get all of that money, or even a cent of it, if the package is approved. He first has to meet several operational and financial targets.
To get the full pay, for instance, he has to deliver to the car market 20 million Teslas over 10 years, more than double the number he has churned out over the past dozen years. He also has to massively increase the market value of the company and its operating profits and deliver one million robots, from zero today.
Tesla chair Robyn Denholm has warned Musk may leave the company if the deal is not given the green light. Credit: Bloomberg
If he falls short of the biggest goals, though, the package could still hand him plenty of money.
Musk will get $US50 billion in additional Tesla shares, for example, if he increases the company’s market value by 80 per cent, something he did just this past year, as well as doubling vehicle sales and tripling operating earnings — or hitting any other two of a dozen operational targets.
Musk vs. Rockefeller
Musk is already the richest man in the world with a net worth of $US493 billion, according to Forbes magazine, and well ahead of some of the wealthiest of years past.
‘He frequently teeters on the edge of disaster…and then pulls back just in the nick of time.’
Tesla owner and money manager Nancy Tengler
The steel giant, Andrew Carnegie, was once worth an inflation-adjusted $US300 billion, according to the Carnegie Corp., well below Musk’s wealth.
Musk is still trailing John D. Rockefeller, but he’s closing in fast. The railroad titan hit peak inflation-adjusted wealth of $US630 billion in 1913, according to Guinness World Records.
For his part, Musk says it’s not really about the money but about getting a higher Tesla stake — it will double to nearly 30 per cent — so he can control the company. He says that’s a pressing concern given Tesla’s future “robot army,” a reference to the company’s Optimus humanoid workers that he doesn’t trust anyone else to control.
Split among shareholders
Many investors have come out in support of the package, including Baron Capital Management, whose founder called Musk indispensable to the company. “Without his relentless drive and uncompromising standards,” wrote founder Ron Baron, “there would be no Tesla.”
Critics include the biggest in the US public pension fund, Calpers, and Norway’s sovereign wealth fund, the world’s largest. They argue the pay is excessive, with the Norway fund expressing concern that the board that designed it, which includes Musk’s brother, is not independent enough. That echoes a decision from a Delaware court nearly two years ago that blasted the process for approving a previous Musk pay package as “deeply flawed” given his “extensive ties” to directors.
Even the Vatican has weighed in, decrying the wealth gap in the world and blasting the trillion-dollar offer in particular.
Tesla sales continue to plunge, with new figures out Monday showing a stunning 50 per cent drop last month in Germany alone.Credit: Bloomberg
“If that is the only thing that has value anymore,” said Pope Leo XIV, “then we’re in big trouble.”
Musk’s record at Tesla is mixed
Loading
Judging from the stock price alone, Musk has been spectacularly successful. The company is now worth nearly $US1.5 trillion.
But a lot that runup reflects big bets by investors that Musk will be able to deliver things that are difficult to pull off, and the way Musk has run the company recently doesn’t inspire confidence. He has broken numerous promises, and his tendency to say whatever is on his mind has sabotaged the company.
Just this year, for instance, he vowed to deliver driverless taxis in several cities, secure regulatory approval in Europe for his self-driving software and push sales up 20 per cent or 30 per cent.
Instead, his driverless robotaxis in Austin and San Francisco have human safety monitors inside. Europeans still haven’t approved his software. And Tesla sales continue to plunge, with new figures out Monday showing a stunning 50 per cent drop last month in Germany alone.
That said, Musk has pulled off the impossible before. His company a half dozen years ago was widely feared to be near bankruptcy because he wasn’t making enough cars, but then he succeeded and the stock soared.
“He frequently teeters on the edge of disaster,” said Tesla owner and money manager Nancy Tengler, “and then pulls back just in the nick of time.”
AP
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
