Hey, everybody. Welcome back to the Elon Musk Podcast. This is a show where we discuss the critical crossroads that shape SpaceX, Tesla X, The Boring Company and Neuralink. I'm your host, Will Walden. Today's episode revolves around the $56 billion compensation package for Elon Musk as the CEO of Tesla. Now Tesla investors are poised to vote on this pay package.
This is the company's proposed relocation from Delaware to Texas. And at an important shareholder meeting this week, analysts warn at the risk that must could leave Tesla to focus on other ventures such as his AI startup XAI, social media platform X. And that is if the pay package is rejected. Remember, this is the largest pay package for any CEO, anytime, ever in the history of
humanity. The voting on Musk's controversial pay package is set to conclude on Thursday, with major consequences for both Musk and Tesla. And over recent weeks, Musk has actively campaigned to persuade shareholders to reinstate his nearly $50 billion pay package, which the Delaware judge who voided it described as the largest ever observed in public markets. Now, Tesla released a video featuring Optimus, which is Elon Musk and Tesla's humanoid robot, instructing shareholders on how
to cast their ballots. Voters were offered a chance to win a Musk escorted tour of Tesla's Gigafactory in Austin. And Musk has been vocal on X, his social media platform, about the vote predicting a win and claiming the public sentiment in is unequivocally supportive. Now, as the vote approaches, the outcome remains uncertain. Major shareholders are divided on whether Musk, often seen as a distracted leader, deserves such
a substantial reward. The final decision may rest on individual investors, many of whom are drawn to Musk's public persona as a genius. Now. The vote has broad implications for Tesla, though, which has faced challenges such as weak sales, global competition and mass layoffs. And Musk has indicated he might leave Tesla if the pay package is denied, potentially pursuing advanced technology projects elsewhere.
He's threatening people. And if approved, Musk would gain more control over Tesla's board through stock options. Now, Tesla Chairperson Robin Denholm has urged investors to support Musk, emphasizing his unique contributions to the company. He said Elon's unique contributions have built Tesla from a company that was in 2018, a loss making ambitious company with significant hurdles and challenges to overcome into what it is today, a company that is
literally changing the world. However, critics like New York City Comptroller Brad Lander argue that the package is unreasonable given Tesla's struggles and Musk's divided focus among various ventures. He said we need a full time CEO who's focused on growing the company and producing great shareholder returns, not allowing for a distraction or
chasing shiny new objects. Now. In 2018, a majority of Tesla shareholders approved Musk compensation package worth $56 billion in stock options instead of a salary. This propelled Musk to become the world's richest person, funding his ventures into space. Brain Digitization and acquiring Twitter's de facto town square. However, some shareholders sued, claiming the process was
improper. Now earlier this year, a Delaware judge invalidated the pay package, calling it an unfathomable sum and noting that it was approved by a board filled with Musk's friends and a former divorce lawyer. The board now asked shareholders to restore the package, which would increase Musk's voting power to nearly 25% and authorized Tesla's corporate move to the state of Texas. Now, the votes outcome is uncertain, with some key investors opposing the package and others remaining silent.
Major institutional investors like Vanguard Group, BlackRock and State Street Corp, holding about 17% of Tesla stock collectively, have not publicly declared their positions. None responded to our requests for comment. At this point. Now about 40% of Tesla's stock is held by non institutional investors, including individual
retail investors. And many are Musk supporters, such as billionaire Ron Baron, who called Musk indispensable to Tesla and asserted that his compensation should reflect that fact. He said our answer is clear, loud and unequivocable. Tesla is better with Elon. Tesla is Elon. That's what Ron Baron said. Yet some investors have become delusioned with Musk amid
Tesla's performance struggles. Leo Coogan, one of Tesla's largest individual shareholders, stated the that he'd vote against the proposal, saying enough is enough. A coalition of seven large institutional investors, including the New York City Comptroller and Amalgamated Bank, has urged shareholders to reject the package, setting a
material governance failure. Now proxy advisory firm ISS criticized the package as excessive despite Tesla's success, Downing it would increase Musk's focus at Tesla at all. Marcy Frost, CEO of the California Public Employees Retirement System, representing 2.2 million public workers, also plans to vote against the package, as it did back in 2018 as well. Now, Frost said that the decision wasn't personal, but about ensuring returns for shareholders of Tesla.
Frost also said it's really important then as a shareholder that we get the return on the capital that were allocated to these public companies. James Park, who was a UCLA School of Law professor, indicated a vote for the proposal would signal shareholders desire from Musk's continued involvement, while a Novo would reflect dissatisfaction within its leadership now.
Denhams later highlighted Musk's role in Tesla's growth over the past six years and stressed the importance of the pay package by retaining his attention and motivation, she wrote. If Tesla is to retain Eli's attention and motivate him to continue to devote his time, energy, ambition, and vision to deliver comparable results in the future, he must stand by our deal now. In January, Musk tweeted about his need for more control over Tesla.
He said I am uncomfortable growing Tesla to be a leader in AI and robotics without having about 25% voting control. Enough to be influential, but not so much that I can't be overturned. Both Musk and Tesla decided to decline for comment on this matter to us today. Now. This vote occurs as Tesla grapples with a significant drop in stock value, having lost more than 30% since the year start. The company reported a 55% plunge in first quarter profits in April due to slowing sales.
And to ease investors worries, Musk promised to launch a fully autonomous robo taxi by August, a timeline which has met with skepticism considering full self driving isn't quite a thing yet now. Park noted that the current economic backdrop would influence voters decisions. He suggested that some retail investors dedicated to Musk might overlook recent events and vote in favor of the package, while others might be disillusioned by Tesla's recent
performance. Analyst Adam Jonas warned that rejecting Musk's pay package could slow down Tesla's AI efforts. Some investors are willing to take that risk. Nell Minow, vice chair of Value Edge Advisors, donated most of her Tesla stock to charity after voting against the pay package. She criticized Tesla's corporate governance, saying there's no way you can consider this board
independent. If he doesn't have enough of an incentive from his current holdings, then I don't know if this gigantic amount of money would make a difference. Kevin Smith, who's and software engineer with a few Tesla shares, was frustrated and he said it seems to be a symbolic gesture against the court. So my symbolic vote is no. This vote will determine Musk's future role at Tesla and could influence the company's direction amid ongoing
challenges. Though investors must weigh Musk's potential departure against his leadership contributions and Tesla's needs. The decision will shape Tesla's path forward in the competitive EV market and AI in the future. Like as we have noticed from Elon lately, he has been stating that if you think Tesla is a car company, you've got it all
wrong. Tesla is a technology company that just so happens to build the best car and they're making AI, they're making robots, solar roofs, power everything. So without Elon at the helm to lead things, where would the company go? That's where I'm going to give my thoughts on this now. I'm a person that doesn't like corporate green. I don't like billionaires that don't give back. Elon has given back numerous times. He pays his taxes, things like that. He's doing OK.
Well in that regard. In my opinion, he's doing all right now. I'm a big fan of SpaceX. If you haven't noticed, I love talking about SpaceX and Starship. It's one of the things that I really enjoy doing. I know he focuses a lot of time at SpaceX due to the Starship program, but he did put some people in place there to take over when he's not available.
So Gwynn Shotwell, of course, and Kathy Leaders, like Kathy Leaders is one of the people that used to run the human spaceflight for NASA and now she runs the Starship factory down in Texas. So he put some leaders in place to take over the things that he used to do. He basically helped build that factory from the ground up down in South Texas. Now, Elon does have people at Tesla that work really closely with them and do jobs that he doesn't do, but he's the visionary.
So think about that. I'm I'm a big supporter of the things that Elon wants to get done. Build robots, build a rocket, then go to Mars. The Boring Company is very cool. I think it's a really cool idea to have tunnels where there's congested traffic or where you just need to go a couple miles and you don't want to sit at red lights for a while or you don't want to get an Uber or whatever. Just go into the tunnel. That's really neat.
The cyber truck's pretty cool. I really enjoy all the Tesla vehicles. They're very fun to drive. I've driven them, driven them Model S and a few others. But if, if it seems like in this regard, and I want to know about this in the comments, it seems like Elon is threatening shareholders almost. I wouldn't say blackmailing them, but he he said that if he doesn't have 25% of the company, his heart's not in it anymore. He just can't get up in the
morning to go to work. He expressed that there were, you know, if he doesn't have 25% voting control, He said, I'm uncomfortable growing Tesla to be a leader in AI and robotics without having 25% voting control, enough to be influential, but not so much that I can't be overturned. So 25% of Tesla is going to make him a lot of money in the future and he made the company so it could be controlled by the
shareholders. And if he has 25% control, they could overturn him if enough people vote against him. And it's just like his pay package. Now, do I think that the pay package is legit 2018? Now, you got to remember the board of directors at that time were basically Elon's friends. You know, I'm just going to put it straight out there. His brother, his friends, people he was very close with were on the board at that point. In 2018, they came up with this package.
So Elon would stay the visionary and he would stay with the company. And at that point, it seemed like a great idea because SpaceX was growing, Tesla was growing, other companies were growing. And at this point, he needed to have control over Tesla. He needed to make money. And since he wanted to make some more money, he wanted us more control in the future. Billions of dollars, 10s of billions of dollars in the future. It makes sense, $56 billion is a lot of money.
But they didn't know it was going to grow to this point. And he did everything he needed to do in order to get that pay package. And if the board of directors said that it was OK and the other members thought it was all right, I don't see why he shouldn't have the money. So some people have commented on this channel about that.
I'm something I got. I got this crazy comment the other day from somebody and say that I said that I'm a left wing Democrat shill or something with the mind virus or something. Dude, I'm going to say this straight up to you who haven't read that comment. I read it and I laughed at you. You're spitting out this rhetoric. That's weird. I just tell you how it's going. What's going on, by the way? I'm being honest with you guys.
I know I'm like, if you, if you listen to this podcast, I don't usually go off on tangents like this. I usually read the news to you and I tell you what's going on and then I log off. And then we can go out about our days, right? About 10 minutes of Elon Musk news. But the fact is you have to look at all points of data for things like this, and I skewed towards both sides on this one. It's a really tough decision because the guy did everything he was supposed to do.
He had all the numbers he was supposed to hit. And if you don't pay the guy for doing his job, then what kind of message does that send? I don't know. Do you think he's worth $56 billion? Is that is that too much money for one person to have And also if he's saying that he has if he the 25% influence on Tesla and if he doesn't get it, well, I can't I can't keep doing my job. That seems kind of weird to me. I want to know what you think in
the comments. If you're on Spotify, please hit the follow button and leave a comment down below or any other podcast platform that you can leave comments on, including YouTube. Please let me know what you think about this because this is a weird, it's a, it's a tough one. And we're going to know on Thursday what's happening to Elon and his control. And if he doesn't get the 25% control and if they don't give him the pay package and if they don't move to Texas, he's going
to flip out 100%. Elon's going to flip out. We'll hear about it on X. He's going to throw a tantrum. Sometimes Elon goes a little bit wild. He's a genius. He's an absolute genius and I will never take that away from him. He's done incredible work so far and he has incredible ideas. But I believe if he doesn't get what he wants, it's kind of going to be like a spoiled brat, you know?
And I put understand why if he doesn't have 25% voting control of his company that he was, he helped start and helped grow to what it is now, I can understand where he's coming from. I can understand why if he doesn't get his money, I can understand where he's coming from because don't mess with somebody's money. Don't mess with somebody's company or their family. And those two things, the company and the money, everyone's messing with them
right now. So if he doesn't get his 25%, I think we're going to hear about it pretty, pretty legit on X after this. So again, let me know in the comments. I appreciate everybody sticking with me on this one. I'm going to do more of these podcasts where I speak my mind a little bit more. I think it's important that we all have a conversation here and we're all part of this together this whole show. So I'm going to continue doing the news for you.
I won't be slanted with it. Eileen Middle. I'm right in the middle. I look at all the data. Sometimes some of these things are, you know, some of the news is a little bit off. You know, it's it try to do it right down the middle and sometimes it's a little bit left, sometimes a little right, whatever. Try to do it as center as possible. But I thought it was funny that somebody said I have a mind virus. Like that's, that's a weird thing to say, a mind virus. Oh my God.
Anyway, thank you. The guy who said this, a mind virus. I know you still listen so you know who you are and I'm not laughing at you, but maybe you're the one with the mind virus. I'm just joking. I really, I really do wish you the best and I'll catch you guys in the next one. Take care of yourselves and each other and make sure to subscribe to the show if you haven't already on whatever podcast platform you're on right now. All right, take care. Bye bye. Hey, thank you so much for
listening today. I really do appreciate your support. If you could take a second and hit the subscribe or the follow button on whatever podcast platform that you're listening on right now, I greatly appreciate it. It helps out the show tremendously and you'll never miss an episode. And each episode is about 10 minutes or less to get you
caught up quickly. And please, if you want to support the show even more, go to patreon.com/stage Zero and please take care of yourselves and each other and I'll see you tomorrow.