Tesla Shareholders MASSIVELY Split On Elon Musk Pay Package — What Happens After The Vote?

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Some attention-grabbing issues crossed my path lately relating to Tesla shareholders and the vote relating to Elon Musk’s pay compensation bundle. And it bought me considering — the larger challenge might not be the vote, however what occurs after the vote.

However let’s begin with the vote.

For starters, I realized that Leo Koguan is voting in opposition to Elon Musk’s compensation bundle, and he’s the third-largest particular person shareholder of Tesla inventory. He holds about $5 billion price of Tesla inventory. Naturally, as I believe everyone knows now, some Tesla shareholders are strongly in favor of voting for Musk’s new pay bundle to make up for the one which was cancelled by a Delaware courtroom, whereas different Tesla shareholders are strongly in opposition to it. However such a big shareholder going in opposition to it looks like a giant deal.

Personally, I don’t have a really sturdy opinion on this (so, possibly there are extra like me), however I might say that he ought to get the pay bundle as a result of I believe the unique one was clearly supported by Tesla shareholders on the time and I don’t even recall there being a lot or any controversy from them over it. I get the factors the Delaware choose made, however I do suppose Tesla stockholders had been strongly behind the bundle initially, so I don’t actually suppose it’s proper to cancel the deal now, years later. Frankly, the compensation was based mostly so closely on the inventory hovering that stockholders had been largely giddy in regards to the risk. If there was controversy round it, that was externally from non-shareholders.

That stated, I additionally agree that Musk has repeatedly made critical strikes counter to his fiduciary obligation because the CEO of Tesla, that he harm Tesla shareholders massively by shortly promoting billions of {dollars} of Tesla inventory to purchase Twitter (and went in opposition to what he stated beforehand about promoting Tesla inventory), and that he has massively harm shopper demand for Tesla automobiles within the US and a bit overseas from his inane tweeting about far-right-wing conspiracy theories and concepts. So, I undoubtedly perceive the gripes of shareholders who wish to hold him from regaining the large pay bundle that the Delaware courtroom voided. And, in fact, there are the problems of his brother (who I like quite a bit) being on the board and different board members being kind of ineffective as unbiased checks on his energy and concepts. Moreover, there’s now a query of insider buying and selling, there’s controversy over whether or not Musk has been utilizing Tesla employees and sources to assist different firms he runs, and there’s a query of whether or not he’s growing AI exterior of Tesla that must be developed inside Tesla. So, regardless that I believe his comp bundle must be accepted, it’s clearly a really messy matter and I see why many, together with Leo Koguan, suppose it shouldn’t be.

However that’s not the purpose of this text.

The purpose of this text is extra about what occurs after the vote, however that is knowledgeable by the heated debate main as much as the vote. The elemental break up appears to return from two very several types of shareholders.

On the one hand, you’ve bought shareholders who nonetheless have an unlimited quantity of religion in Elon Musk to guide the corporate ahead. These shareholders consider Tesla’s speedy innovation and future breakthroughs rely totally on Musk remaining the captain. The assumption is that the extra energy and compensation you give Elon, the extra he’s centered on Tesla, and the higher Tesla does. If the vote goes in opposition to Musk’s proposed compensation bundle, these shareholders are more likely to have their religion within the firm shaken to some extent, and if Musk decides he’s had sufficient working Tesla and needs to give attention to a separate AI firm, X, or one thing else, one may think about these stockholders bailing (to various levels). Frankly, in essentially the most excessive, if Musk stepped down from his CEO position or was faraway from it, I believe there’s be a mass exodus of Tesla inventory.

On the flip aspect, many shareholders suppose Elon Musk is harming Tesla, maybe even every day. Analysis exhibiting Democrats are a lot much less inquisitive about shopping for Teslas, lack of gross sales progress regardless of dramatic worth cuts and leasing offers, and lack of latest fashions and innovation have many stockholders involved that the corporate can’t develop as wanted with out new management. Fixed sh**posting on X has not been contained, and stunning swings in technique (like reducing nearly all the Supercharging division) have led to many individuals promoting their shares and others on the verge of it. If shareholders vote to present Elon Musk billions of {dollars} in inventory once more, I think about a variety of these shareholders may abandon ship. Would Leo Koguan go away his $5 billion in? Would he take some out, or all out? What about huge institutional shareholders who could have seen sufficient?

As you may see, in both case (whether or not a yea vote or a nay vote), you may think about a big portion of Tesla shareholders getting disillusioned and pulling their cash out.

In different phrases, it nearly looks like Tesla inventory is about up for failure both manner.

Possibly I’m studying an excessive amount of into the debates, and stockholders on both aspect would largely maintain no onto their shares matter what occurs. Nevertheless, it’s onerous to consider that, particularly when contemplating the warmth and fervour included in these debates. Other than the X screenshots included above, I learn by way of a variety of back-and-forth feedback from each side, lots of whom appeared to have very sturdy emotions in regards to the matter. And maybe that comes all the way down to the truth that this vote may have a giant impact on how for much longer Musk stays CEO or steps again a bit from Tesla and strikes on.

What do you suppose?