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Well, Elon Musk gives now the richest person on the planet.
More than half the satellites in space are owned and controlled by one man.
Well, he's a legitimate, super genius, legitimate.
He says, He's always voted for Democrats, but this year it will be different.
He'll vote Republican.
There is a reason the US government is so reliant on him. Alon Musk is a scam artist and he's done nothing.
Anything he does, he's fascinating the people.
Welcome to elan Ink, Bloomberg's weekly podcast about Elon Musk. It's Tuesday, June eleventh. I'm your host, David Popodopolis. We are talking Tesla, specifically about the upcoming shareholder meeting to determine, among other things, Elon Musk's pay package. It's a controversial topic as a Delaware judge throughout his previous fifty six billion dollar compensation, and there are people campaigning loudly on both sides. We're gonna hear from some of them and
also consider the current comatose state of Tesla stock. Ultimately, the question is how much does this vote matter?
A lot?
It turns out to Elon, but probably much less to the woman who holds his fate in her hands. Lastly, we'll dissect a sudden and explosive feud with not one, but two two of Elon's rivals talk about all these things. We are joined by our all star panel, Max Chafkin, senior writer at Bloomberg Business Week, Colomax Hey, David Hey, and Dana hall our Ace Elon Musk reporter Dana Welcome Hey. Later on, Esha Day, a senior reporter with the Market's team who focuses on evs, will join us to talk
Tesla stock. But Dana, let's jump right into it. The vote on Elon's pay package, among other votes, will happen on Thursday, But just remind us of what happened back in the courtroom in January and what's occurred in the month since.
Yeah, So, to back up for a little bit, in twenty eighteen, shareholders overwhelmingly approve this kind of crazy like staggering moonshot pay package that was supposed to incentivize Elon Musk to stay focused on Tesla. At the time, everybody thought it was crazy, but he hit all of the milestones and became the richest man in the world. In
the process. The problem is that Tesla's board is filled with his people, like his brother Kimball and his friends and in you know, many critics would say that it's a captive board, and a shareholder sued over these issues,
and litigation went on for years. I flew to Delaware to watch Elon Musk and former board member Antonio Gracias testify in court, and then in January, the judge in Delaware basically came out and sided with the shareholder and said, you know, this board is like captive and rife with conflicts of interest, and the board really didn't negotiate this pay package and this is hugely problematic. So she voided
the deal. Elon got furious and now to sort of remedy all of the faults that she found with the twenty eighteen package. Tesla is doing this kind of weird, risky novel legal strategy where they're bringing the same package before shareholders again six years later, in the hopes that like having a revote, will somehow convince the Delaware court system that everything is now fine okay.
And that's where we stand out now, Max and Dee, this is a pretty unusual pay package. I feel like when you talk about CEOs of big companies here in the US, you talk about millions with an M, I mean billions with the bee as part of you know, bonus included and all that is is almost unheard of.
Right when you see big numbers like this in the billions, it's almost always like a huge amount of stock, which is which is what this was.
This was not a cash compensation.
This was the board giving him a huge number of stock options, which is kind of normal in the world of startups, you know, much smaller companies, but is and even the kind of structure of this and the upside and all that, it would be kind of normal if this were a much much smaller company with a few venture capital investors.
Very unusual in this case.
Of course, Elon has always kind of wanted to run Tesla as his as if he were running a private company, which you know, creates it creates certain opportunities.
I mean, he's even said he's flirted recently with the idea of taking Keesla private again, right right.
And he of course we all know he did the funding secured thing. He's he's done this multiple times. I mean, you know, it has it creates certain things that I think work really well for Tesla, and we're but we're running into a situation where, yeah, it seems like maybe there's some fundamental problems with how Elon thinks of himself and his role within the company, you know, vis a vis the American legal system in the Delaware courts and so on.
All Right, so I want to listen for a second to the yes case and the no case, i e. Those who are arguing that yes, we the shareholders of Tesla should give Elon his pay package, or no we shouldn't. We're going to listen to the yes case first, as expressed by Ron Baron, who's a big Tesla shareholder, and he said this on CNBC the other.
Day, I think in the next ten years we'll probably make four or five times our money again in Tesla. So so he's created tremendous wealth for people, and he was paid. If his contract is enforced, which I think it should be, he's paid fifty six billion dollars. So it's like winning the lottery. You know, if you and Joe was talking about it before he win the lottery, you don't tell someone I'm sorry you won so much money. You have to give it.
I remember think that's the yes case.
The no case we get from Earl Fronk puppy banning.
I think the.
Court rightfully pointed out some significant problems with the initial disclosure of the compackage. Also, the court ruling has pointed out obvious problems with the general governance of Tesla, which would become so profound over time as you watch elon by a social media company and tarnish the brand and seem to be a part time CEO. This no vote is an opportunity for shareholders to speak up about these issues and hopefully bring some rational governance back to Tesla.
Thank you now, Dan, What's up with this frunk puppy name?
So.
Earl is a fascinating guy. I've known him for a long time. He is a big Tesla fan, and he's very active on x for really known as Twitter, and
he's very funny. He's got a great meme game. He's been like one of these longtime retail shareholders who is very active in the in the Tesla community as it is, and the fact that Earl is voting no is significant because Tesla has been actively courting retail investors that the dynamic here of the before the vote on Thursday is that large institutional investors, including mostly pension funds, as well as proxy advisors Iss and Glass Lewis, are very much
against the ratification of the pay package. They're very worried about further dilution, and so Tesla is actively courting its you know, loyal retail base to vote yes, and Earl is kind of like a prime example of one of the retail shareholders who is very vocally voting no.
Right, And so the fronk puppy isn't happy. So but that gets at something that I really want to lean into for a second here. So we know, Dana that last time back in eighteen, the vote was pretty much a landslide for Elon right the board.
Seventy three percent of the vote's cast were for Elon. And at the time, you know, Tesla's investor relations department did a real vigorous job of kind of selling this this you know, unprecedented compensation plan to its largest investors. But a lot has changed since twenty eighteen. Tesla is now in the S and P five hundred, which means that there's more index funds and more passive investing Elon bought x or, bought Twitter and renamed it x Elon
started another company. The stock is tanking, so like it is a very different dynamic. The shareholder base has shifted, just the whole perception of Elon as a CEO has shifted. And to me, what's very funny is that the whole point of the twenty eighteen package was to keep Elon focused on Tesla. You could argue that that has not worked.
I would say yeah, I would say not. I think he probably founded like three additional companies in the time since I mean obviously the stock for the most part did quite well until it didn't.
But just imagine how many companies he would he had.
You'd have seventy companies right now. Had not give him that much.
You know, the pitch back then, even if you were a skeptic, I think was a little if, even if you were thinking the way Frank Puppy is thinking, was a little easier to swallow because it was sort of like, yes, this is an insane amount of money, but he only gets it if our market cap goes up like tenfold, So like, you know, it's it's sort of like a you know, win win. What's what's difficult here is it's
now backward looking. I mean, the market cap is what it is, it's actually slightly it's fallen a little bit, you know, of course over the last you know, year
or so. But it's but but the thing is, it's sort of like Tesla's in the position of saying, well, we have to honor the deal, and you know, and some Tesla shareholders, I think understandably, especially given how much how Elon Musk is behaving, especially given all the sort of big questions about his focus, are sort of I think thinking it'd be nice to get out of it, right.
I mean, the thing at the time and a teen was I'm handing you these options to get you to focus and drive the company forward and turn it into this enormously valuable company, which he did once that struck down, Okay, and now he doesn't have it. Well the sort of the max to your point, right, the value now is the value? Why do I I don't know, if I'm a shareholder, why do I need to give you that money for past performance?
Right?
I think the idea is that, like the guy does need to get paid. I mean, at some point they're going to have to figure out how to compensate him for his work over the past six years. And that's certainly the argument that like Robin Denholm, the chair of the Tessel board, and all of the bulls are making like a deal is a deal, like pay the man like he does need to be compensated in some way.
Yeah, Dan, Actually we have a clip of Robin pitching the yes vote, and here it is.
The Tesler of today is utterly transformed from the Tesler it was in twenty eighteen. Thanks in large part to Elon's leadyship and vision, we are on the of our next great growth waves. You have seen for yourself what five years under the leadership of an incentivized Elon can, due to the value of your investment, protect that same value creation potential for the future.
Man, that's a very good accent. It almost makes me want to vote yes myself. But I wonder, Dana, if Elon or perhaps Robin would probably say, hey, no, nobody put me up to this. But it seems like internally within the company there are a lot of Tesla employees, high ranking employees, getting out pushing the yes case. Perhaps speaks to a bit of the sense of urgency inside team Elon, Oh for sure.
I mean they have a sense of the vote count, right, and they know what percentage of retail investors have voted, and they are actively talking to their largest holders and they know where they stand. I mean, just over the weekend we saw Norway's Sovereign Wealth Fund, which is a top ten holder, come out and say that they're are no. I mean, the way to think about this is, this
is a political campaign. Is the candidate, his pay package, is the platform, and you've got surrogates from the board, Ron Barron, Kathy Wood like coming out on CNBC and elsewhere, like talking about the s case. So it's like this is a campaign with like a lot of surrogates. But they wouldn't be running such a hard campaign if they
had the votes. Like, this is going to be a very close vote, and I personally think that it will pass, but it's not going to pass by the margin that it did in twenty eighteen because it's just a very different company.
Now, it's a different Yeah, it's a different company in a different time.
Okay, Max.
Now, even if the vote is yes in the end, which as Dana is telling us, is the base case here, does it actually even matter is it binding here? I mean, the reality is the judge doesn't have to take this vote into account if she doesn't want to.
No.
No, Dana is comparing to a political campaign, which I think is right in this that like perceptions and spin are going to be really important in kind of evaluating the result of this thing. But it's more like it's not like a presidential general election. It's more like a primary in a state that doesn't really matter on its own.
Like think like the Iowa.
Caucus, right, the Iowa Caucus doesn't decide the IO any Yeah, exactly, but it isn't It isn't binding in the sense that it's not going to decide the election, but it is gonna shape what happens next. And I do think here, if it passes, it seems like the path is pretty clear. Right, They're going to appeel the Delaware Court decision. They're going to say, look like, we disclosed all this stuff to our shareholders.
They're still for.
It, dear Judge.
Mind now, But if it fails, or if it passes very narrowly, I think it's pretty bad. And it's and I think it's especially bad if it fails because then all of a sudden like I don't know, like they're legal strategies out the window. They're gonna be They're gonna be kind of back where they started, and I think they're gonna have to start to think about renegotiating and pay at a lower level, which is gonna send Elon.
It's gonna send him ballistic. I mean I would think that to a certain degree. If it is a no vote, given Elon has publicly threatened to take his toys and leave Tesla, it would essentially be the shareholders calling his bluff, like dude, go, there's the door, and then the question is, Dana does he go?
I think it depends on how much of a narcissistic injury a no vote would be to him. Because he is still like the largest shareholder in the company. He's got thirteen percent. It is hard to imagine him being so upset that he would just quit. But he's an unpredictable, very emotional person, and you have to kind of wargame for every scenario. It's just funny, like an autopileo engineer will like be on X saying, oh my Elon's so great, I've learned so much from him, and then you hear,
then Elon will respond like much appreciated. It's like how It's like how grassroots is this CA campaign? And then on the other side, you know Norway's sovereign wealth fund. You know some pension fund trunk puppy. Here's amalgamated back frunk pugpy. Another big shareholder is this guy Leo who is in Singapore. He's like one of the largest retail shareholders. He's absolutely a no. And uh, I think it's just going to be super close. I would love to be
able to figure out the title vote telle. I'm like a Senate majority leader. I've got this like whip list in my head, Like every day it shifts a little bit, and I have to tell you, Like Tesla employees are telling me that they're getting phone calls like asking them have you voted? And if someone says no, they're like, oh, would you want to vote right now? Like they are really pushing retail. They're calling people, They're emailing people like shareholders have gotten voicemails.
Why wait wait wait wait wait.
But so they're calling their own employees who own the stock and they're saying, dear sir, have you big brother? Oh you haven't, big Brother would like you to vote.
Now, well, they really want you to vote, I mean, and there is a website called vote Tesla com Tesla's running ads.
There's a video on the Tesla website and you know, being distributed on social media that we're optimists. The robot that Elon Musk has said will be the greatest consumer product of all time. You know it's gonna be worth many trillions of dollars is also pitching the vote.
It's talking.
Oh really, it's talking to you and telling you the Tesla shareholder.
As convincingly as Robin Dennie.
They're pulling Yeah, they're pulling out all the stops.
Your vote decides the future of Tesla.
We made it easy to cast your vote any of three ways, online, by QR code, or by phone.
All right, the the bots pushing me, all right, Dana, before we move on. Of course, the pay package isn't the only thing being voted on on Thursday. Any other highlights that will come up in terms of votes at the shareholder meeting.
Yeah, so there are twelve resolutions. I'm sure that every listener of the Elon podcast has carefully read the very long single one of them proxy, every single word of the proxy. But there's twelve resolutions. I think you know at the very beginning we're going to hear so two board members are up for reelection, James Murdoch and Kimball Musk, Elon's younger brother. That's going to be key to watch.
There could be like a revolt against those two. And then proposal three is you know, moving the company's legal headquarters from Delaware to Texas. And then proposal four is the pay and then there's other things about like the right to unionize. So the pay package is the big one, but we've got to pay attention to the other ones as well, And we could have a split scenario where like maybe shareholders say yes on Texas but no on pay. Maybe maybe it's yes on James Murdoch, no on Kimball.
Like it could go many different ways.
Okay, all right, So we'll see what the vote is on Thursday, and if there's some big shocker, perhaps elon Inkle listeners, we will be in your feed that evening or the following morning. We're gonna go on to talk about Keesslas Stock and to do so, we're bringing in
Esha Day, Senior Reporter, and the market's team Air Bloomberg. Welcome, Mesha. Hello, So the last time you were on, you told us in our vast audience that Tesla is a wildly volatile stock, perhaps the most vowatile in all of the s and P. Five hundred and I am as I look at the Bloomberg terminal, I see a stock that is comatosed, flatline, boring as hell? What is going on, Esha?
I like that word boring And who would think of, you know, using that word along with Tesla or elon Moscow that matter?
Right?
But sure, if you look at Tesla shares over the past month or so, the stock has been trading between a very very tight range about like ten twelve dollars usually, and that is not typical of the Tesla stock.
Right.
Let's take a look at some of the measures that traders usually look at, For example, historical volatility. It's basically a measure to kind of get a sense of how the stock price has been fluctuating in over a certain period of time. So Tesla shares historical volatility over ten day period last week, I think last Friday will be precise drop to its lowest since October of twenty twenty one.
So that tells you that this is a typical of Tesla's stock, But at the same time, this is rather typical of a stock that is kind of expecting a milestone event that could lead to further volatility in the future. Whenever I see a stock behaving this way, beat Tesla or any other name, what it tells me is that investors are moving to the sidelines, and that that is understandable.
Investors try to move to the sideline and kind of hunker down when they think that there will be a lot of volatility in the recent time, right.
So the milestone event, the breakout essentially that they're waiting for higher or lower is do we is our sense that it's tied to the pay package vote.
One hundred percent. So a lot of the conversation, I would say, most of the conversations I've been having with investors and market watchers and just like broadly stock watches and pundits, it has been that this is a near term risk event for the stock, and that really is why we're seeing kind of this very little movement in
the stock in the recent times. But then uncertainty is not just about the musk Bee package at this point, right, everything about Tesla is kind of shrouded in a lot of confusion and uncertain that at this point.
Just to pause there for a second. So the concern again is that because if he wins the vote, I suppose maybe the stock whatever ticks up a bit higher. But the concern is lo and behold, he loses the vote, and as Dana was saying earlier, he potentially gets so ticked off he just says, screw you all, I'm maddy here he walks, and then all of a sudden, the bottom falls out of the stock. No, I just made all that up.
No, it's not supposed to be that big of a risk event. People are waiting on the sidelines and trying to understand what exactly comes out of this vote. But it's expected to be a near term risk event, is what everybody's telling me. In the longer term, nobody thinks that even if it's a negative vote, Elon Musk is going to be ticked off enough that he would completely as you said, like, maybe shareholders will call his bluff, but it will be a bluff. It will be proven
to be a bluff. So but then there are other risks. This is not the only risk, but Tesla at this point, there's also the risk about is this like going to be an AI company at all? You know, the entire kind of pivot that Musk tried to pull about Tesla not being an EV company anymore, it's going to be
an AI company. That's an uncertainty. There's also the elections later this year, and a lot of people are worried about what a potential Trump win could mean for electric vehicle sales in this country in the at the time.
And since they're already.
Slow, they're slowly, they've slowed quite a bit. Now, Max, we're talking about a stock that is stabilized, and one of the reasons why I wanted to talk about the stock is, yeah, this is a rare patch of apps tranquility in the stock, but after it absolutely collapsed at the beginning of the year.
Right, Yeah, Yeah, I mean it's been really bad. I think what's calm things down? As Elon Musk said, you know, as Esha's hinting at, you know, we're gonna pivot towards robotaxis, and everyone's kind of you know, who knows, maybe that looks better than I guess a lot of people think maybe they lift the curtain or the sheet off of the new Robotaxi model in August as as many people expect, and it is, it is something that feels more immediate than I'd say most people who follow this this technology
would expect. So like, there's sort of possible upsides, but they're all you kind of really have to squint for a lot of them. You know, maybe Trump and Elon get really close and he gets selected and somehow that I mean, the one thing I'll say is people who are really worried about Tesla about Elon Musk also tend to be people who think that Tesla could do okay
without him. And I think there's been a there's sort of an evolution happening, and this conversation around pay shows it where for a long time, I think if you pull Tesla investors, they would all say that basically the company is worthless, pointless, give up whatever without Elon Musk.
And I think the fact that some people are voting against this and that more people are coming around to it suggests that there is a feeling that maybe Tesla without Elon Musk is more okay than we realized before.
Dan in conversations you have with your sources, does a post Elon Musk Tesla come up more now than before?
I mean, Elon Musk has been the CEO of Tesla since two thousand and eight. He's like the longest running CEO of any car company ever. Like it's just like this, it's just been this incredible run. But I do think that like there is a scenario where like Tesla just becomes a car company and someone else runs it and they just make cars and they like forget about all this robotaxi stuff. That's kind of hard for me to envision because the brand is so intertwined with him and always has been.
Yeah, so esha on that where you have have indeed some shareholders, some investors arguing that at this point, as improbable as it sounds, Elon is hurting the company in the stock more than he's helping it. But you're telling us that absolutely positively. If it's a no vote that causes these will Elon leave questions the stock tanks, you say, no, I no, no, I haven't gotten a single thing, right.
I don't think anybody's expecting this to be a big selling event, And I think I can kind of agree with Dan I hear Tesla is still very Tesla is still very synonymous with Elon Musk. So people think that if Tesla, if Tesla wants to be just an EV company, yes, it can probably do without Musk. But if Tesla has to justify those insane valuations of its stock, then it has to become an AI company, and nobody thinks Tesla
can really do it without Musk. So the idea is, even if the vote is a non it could be some weakness in the stock, which has anyway not been the most exciting stock in the market for some time now. But at any point, especially in August, if there's a very exciting unveiling happening of the robotaxi, this can you know, sky's the limit?
Yeah, esha. And perhaps when that exciting unveiling of the Robotaxi happens, we'll have you back on when you are that. Don't bring us boring again, You're better than that, bring us wild surprising news.
Tell the stock.
Okay, but thank.
You for joining us.
Thank you.
Okay, Max, I feel like we had no feud last week, but we're back with a big time oh man.
Huge, this is you know, this is a big breaking breaking. This is high both on the feud board in terms of the ranking of the feud, but also high because we're talking about some of the most important executives in the business world, some of them powerful people on Earth, and they are feuding, which I love. Yesterday, Tim Cook and a bunch of Apple executives went through a huge sort of developer conference.
You know, this is one of their regular events.
It's one of the event where they talk about software updates, and it was all about AI. And there were a bunch of little things, you know, the iPad. I don't know if you knew this, David. The iPad has a calculator now. But the sort of most significant announcement was that there is going to be an integration with open Ai inside of iPhones and I believe eventually, you know, other Apple products, so you can essentially ask Siri to
ask open Ai something. And while this was going on, Elon Musk, as he often does, picks up his phone and starts sending messages and the nature of the messages are Apple is terrible.
This AI thing is an affront of privacy.
If if this happens, I will ban Tesla employees from bringing their iPhones even proposed a sort of solution. He's going to have little Faraday cages, that's a little metal boxes. Employees will have to put their iPhones in on the way into the office to sort of keep Tesla and his other companies pure of this nefarious influence of this AI company that he doesn't like.
And of course this is a this is a.
Yeah, So it is he's rekindling simultaneously too few Exactly.
This is Elon Musk versus Tim Cook, which we saw playing out during the sort of conversation of advertising on X last year, and this is Elon Musk for Sam Altman. So essentially Elon Musk, I think, in addition to kind of expressing his continued distrust, distaste and so on for Open Ai, also kind of, you know, as he does, maybe watching a lot of people talking about Apple's new calculator and talking about Apples and new AI features and.
You know, sort of missing the spot.
Still ranting. This morning he woke up to it. It was like, the truth is that handing your data over to digital superintelligence that Apple themselves cannot even build or understand at the operating system level is insane. So he's kind of like It's like this two part thing where like I'm worried about your privacy and you should be too, but also like Apple can't even build AI on our own. Yeah, it's like a feud within a feud. It's like a nesting feud.
Now.
I think, you know, Elon Musk is probably right to say, hey, we should be skeptical of what a giant company says about privacy, especially when we're talking about AI. But there is some irony, maybe even a little hypocrisy here, given that Elon Musk has his own competing AI thing, and even amid all these tweets, is threatening to you know, form a partnership with Samsung and create.
His own like a groc phone or something.
So I'm not sure how much of this is just, like I said, competitive, maybe.
Jealous, a little bit of jealousy, all right, But let's break this down though for a second, because it seems to be setting up like there's like a two one one cage match Altman and Cook versus Elon is essentially would just come down to Cook, who I believe is pretty fit.
Cook is fit, but he strikes me as a pretty you know, he's like a pretty laid back guy.
You know, he's very California.
I don't killer instinct, and of course Musk as we know, he's trained on the streets of hard knocks and he knows all the judo tricks. We've talked about this at length of the podcast, so I'm a.
Little concerned you could take the two of them out.
Now.
The question is are we talking about a tag team or a two on one.
Sam is also younger, but like birthday coming up, they're both got a little bit of an age different.
Yeah, does he have the girth though?
To man?
Okay, before we move off the feud, beyond all the oddity of it and the surrealness of it, is there at the end of the day, anything actually serious about it, Like could if he really bans these products from from integrating with his own products?
No, I mean I don't think.
I don't think he's going to ban iPhones for from Tesla headquarters. I do think like the thing that I started, because yesterday I was pretty dismissive of this. It just looked like a guy with main character syndrome, you know,
wanting to be the main character. But today there are a couple of tweets he was responding to talking about the prospect, like I said of a partnership with another phone company, a groc phone, and that if I were a Tesla shareholder, I would be that would give me a little pause, because like if Elon Musk starts a phone company that's another you know that or like company you know and it just starts to make you think like, okay, like maybe he's really serious, Like maybe he really does
intend to take his AI talents to the handset rather than building him in the court.
Well, you gotta say this, whether the product's any good or not, the groc phone sounds pretty damn cool.
It's just it's so funny that he's like, you can't trust open the eye. What we need is a chatbot that is cooler and that's gonna, you know, solve all our problems.
Max Dana, thank you very much, Thank you great to be here. This episode was produced by Stacy Wong. Naomi Shaven and Rayhan Harmans are senior editors. The idea for this very show also came from Rayhan Blake Maples handles engineering, and we get special editing assistants from Jeff Crocott, Antonio Muffarech and Arafat Jalasho Perry. Our supervising producer is Magnus Hendrickson. The Elon Inc. Theme is written and performed by Taka
Yasuzawa and Alex Subiira. Brendan Francis Newnham is our executive producer, and Sage Bauman is the head of Bloomberg Podcasts. I'm David Papadoppolis. If you have a minute, rate and review our show, it'll help other listeners find us. See you next week.