Elon Musk offers Tesla factory tours to shareholders who will vote on his $75.5 billion pay package
Sign up now: Get ST's newsletters delivered to your inbox
The pay package was rejected by a judge who said it was negotiated by directors who appeared beholden to Mr Elon Musk.
PHOTO: REUTERS
Follow topic:
SAN FRANCISCO - Billionaire Elon Musk is offering tours of Tesla’s factory in June to 15 shareholders who vote on his US$56 billion (S$75.5 billion) pay package, the latest effort by the electric vehicle maker to rally votes for the compensation after a court struck it down.
The upcoming vote, whose result will be announced at the company’s annual meeting on June 13, is seen as a referendum on Mr Musk’s leadership as investors worry that he is distracted by his other ventures and that his often controversial comments are weighing on the reputation and sales of Tesla.
The company is making an unusual and public effort to rally support for Mr Musk’s pay. Its board has justified the pay deal by saying it is necessary to make sure Mr Musk prioritises Tesla over his other commitments.
Tesla has asked shareholders to reaffirm their approval of the record-breaking compensation that was set in 2018 but was rejected by a judge who found the package was negotiated by directors who appeared beholden to Mr Musk.
“Don’t delay, vote today!” Tesla said on May 28.
Led by Mr Musk and other Tesla executives, the tour of the company’s production lines for Cybertrucks and Model Ys in Texas will take place on June 12, the day before Tesla’s annual shareholders’ meeting, Tesla said on its website.
The move is “the last-ditch effort to try to charm retail investors”, said Ms Nell Minow, vice-chairwoman of ValueEdge Advisors, an advisory on corporate governance.
According to S&P Global Market Intelligence, 44 per cent of Tesla’s common stock is held by non-professional shareholders including retail investors, the highest percentage of the 10 largest companies in the S&P 500.
“I think it just speaks to his grandiosity that he thinks that somehow being in his presence is going to have the results he wants. I don’t think he’s changing anybody’s vote from doing this.”
Proxy advisory company Glass Lewis said on May 25 that it had urged Tesla shareholders to reject the pay package, citing Mr Musk’s “slate of extraordinarily time-consuming projects”.
“His focus is clearly not just on Tesla,” said Ms Kristin Hull, founder of Tesla investor Nia Impact Capital, who voted against the pay package.
The world’s richest person, Mr Musk is also chief executive of SpaceX, acquired Twitter in 2022 and started AI company xAI, which raised US$6 billion in its latest funding.
Mr Musk owns around 13 per cent of Tesla, and exercising his stock options would result in his owning 22 per cent of the company.
He has threatened to build artificial intelligence products outside of Tesla if he cannot get 25 per cent voting power, which would require some of the stock options in the compensation deal.
Building AI projects outside Tesla could hurt Tesla’s valuation, which relies on its AI capability in self-driving technology.
Mr Musk said that the world’s most valuable carmaker would be “worth basically zero” without full self-driving capability. REUTERS
