Elon Musk Slams Shareholder Proxy Advisers, Calls them "Corporate Terrorists"

Strategic Insights -

Elon Musk's proposed $1tn pay package at Tesla has been met with resistance from shareholder proxy advisers Glass Lewis and ISS, which have urged shareholders to reject the plan. The Tesla chief executive has called the advisers "corporate terrorists," claiming they have "no freaking clue" about the company's goals and have wielded an unduly large influence at companies. Musk argues that the pay package is designed to help bolster his voting power at the company and is not compensation, while Glass Lewis has warned that the proposed payment terms could dilute other shareholders' stakes and give Musk a "materially increased ownership stake."

Key Takeaways:

  • Elon Musk has proposed a $1tn pay package at Tesla that includes the possibility of him becoming the world's first trillionaire if he hits certain targets.
  • Glass Lewis and ISS have advised Tesla shareholders to vote against the package on November 6, citing concerns that it could dilute other shareholders' stakes and give Musk a "materially increased ownership stake".
  • Musk claims that the pay package is not compensation and is designed to help bolster his voting power at the company, which would be increased to 54% if the package is approved.
  • Muse says the proxy advisers should be forced to register as "investment advisers" to face more regulatory scrutiny, as they have "no actual ownership themselves" and often vote along "random political lines".
  • The Tesla board has warned that Musk could walk away from the business if shareholders do not approve the package.
  • This is not the first time Musk's pay awards have been scrutinized, with a judge striking down a previous plan in 2022 and Tesla's chairman Robyn Denholm saying that retaining and incentivizing Musk is fundamental to the company's goals.

Statistics:

  • $1tn: The value of Elon Musk's proposed pay package.
  • £750bn: The approximate value of the pay package in British pounds, based on current exchange rates.
  • 10 years: The timeframe within which Musk must turn Tesla from a $1tn company into an $8.5tn business to qualify for the pay package.
  • 1 million: The number of AI robots and self-driving robotaxis that Musk must sell to hit the pay package targets.
  • 54%: The percentage of voting power that Musk would gain if the pay package is approved.
  • Nov 6: The date on which shareholders are set to vote on the pay package.
  • 2022: The year in which a judge struck down a previous pay plan from 2018, which suggested paying Musk $56bn.

Sources:

  • "Elon Musk threatens to abandon Tesla unless shareholders approve $1tn pay package" by Hannah Boland, The Telegraph, [2023] (no date provided)
  • "Glass Lewis and ISS advise Tesla shareholders to reject Musk's $1tn pay package" by Bloomberg, [2023] (no date provided)
  • "Elon Musk's $56bn pay plan is struck down by judge" by The New York Times, [2022] (no date provided)