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Elon Musk He turned down many of his potential buyers Tesla With his entry into politics there was a sharp decline in cars and sales. But the stock has gone up anyway and now he wants the company to pay him more – a lot more.
Shareholders gathered on Thursday for Tesla’s annual meeting Austin, texasA proxy vote will decide whether to grant the company a grant to Musk or not. ceo And already the richest man in the world, with enough stock to make him history’s first trillionaire.
It’s a vote that has sparked heated debate on both sides of the issue, with even the Pope commenting on it as an example of income inequality.
Many pension funds have come out in opposition to the package, arguing that the board of directors is too beholden to Musk, his behavior recently has been too careless and the money offered is too high.
Supporters say Musk is a genius, the only one capable of ushering in a Tesla-dominated future in which hundreds of thousands of self-driving Tesla cars — many of which are without steering wheels — would transport people and humanoid Tesla robots would march around factories and homes, picking up boxes and watering plants. The salary, he says, is essential to motivating him and keeping him focused.
Musk has threatened to leave the company if he doesn’t get what he wants and has called some critics of the package “corporate terrorists.”
what is happening for votes
To get his Tesla shares, Musk must get approval from a majority of the company’s voting shareholders. Improving the odds, Musk got the chance to vote his shares worth 15% of the company.
Shareholders first heard about the pay package in September when the board of directors proposed it in a detailed filing with federal securities regulators. The 200-page document also includes other proposals up for a vote at the meeting, including whether to allow Tesla to invest in another Musk company, XAI, and who should serve on the board in the future.
How can Musk get $1 trillion?
If the package is approved, Musk won’t necessarily get all the money or even a percentage of it. It will first have to meet several operational and financial targets.
For example, to receive a full salary, he would have to supply 20 million Teslas to the car market over 10 years, more than double the number he has produced in the past dozen years. They have to massively increase the company’s market value and its operating profits and go from zero to delivering one million robots today.
However, even if he misses the biggest target, the package could still net him a lot of money.
For example, Musk will get $50 billion in additional Tesla shares if he increases the company’s market value by 80%, something he did just last year, as well as for doubling vehicle sales and tripling operating income — or for meeting any two of a dozen operating goals.
musk vs rockefeller
According to Forbes magazine, Musk is already the richest man in the world with a net worth of $493 billion, well ahead of some of the richest people in previous years.
They are worth more than the two Cornelius Vanderbilts, 19th-century shipping and railroad magnates whose inflation-adjusted wealth was worth $200 billion or so at their peak. According to Carnegie Corp, steel giant Andrew Carnegie was once worth $300 billion, much less than Musk.
Musk is still lagging behind John D. Rockefeller, but he is making rapid progress. According to Guinness World Records, the railroad titan reached a peak inflation-adjusted wealth of $630 billion in 1913.
What really motivates Musk, or so he says
Musk says it’s not really about the money, but about getting a greater stake in Tesla – it will double to about 30% – so he can control the company. He says this is a serious concern given all the power Tesla will soon have, especially something he recently referred to in an investor meeting as its future “robot army.”
This was a reference to Tesla’s Optimus division, which creates humanoid workers that will be so numerous that, as Musk recently said, he wouldn’t want anyone else to control them but himself.
distribution among shareholders
Several investors have come out in support of the package, including Baron Capital Management, whose founder described Musk as indispensable to the company. Founder Ron Baron wrote, “Without his tireless drive and uncompromising standards, there would have been no Tesla.”
Critics include CalPERS, America’s largest public pension fund, and Norway’s world’s largest sovereign wealth fund. While they argue the salary is excessive, the Norway fund has expressed concerns that the board that designed it, which also includes Musk’s brother, is not independent enough. Two giant corporate watchdogs, Institutional Shareholder Service and Glass Lewis, said they also were voting against it.
Even the Vatican has weighed in, condemning the wealth gap in the world and particularly condemning the trillion dollar offer.
“If this is the only thing that has any value anymore,” Pope Leo XIV said, “then we are in big trouble.”
Musk’s record at Tesla is mixed
Judging by the stock price alone, Musk has been spectacularly successful. The company is now worth $1.5 trillion.
But that runup reflects investors’ big bets that Musk will be able to deliver things that are difficult to achieve, and the way Musk has run the company recently doesn’t inspire confidence. He has broken many promises and his tendency to say whatever is on his mind has hurt the company.
This year, for example, they vowed to introduce driverless taxis to several cities, gain regulatory approval in Europe for their self-driving software, and increase sales by 20% or 30%.
Instead, Austin and San Francisco have human safety monitors inside their driverless robotaxis. The Europeans still have not approved his software. And Tesla sales continue to decline, with new data out Monday showing a staggering 50% decline last month in Germany alone.
That said, Musk has done the impossible before. Half a dozen years ago his company was widely feared to go bankrupt because he wasn’t making enough cars, but then he became successful and the stock soared.
“He often teeters on the edge of disaster, and then pulls back when the time comes,” said Nancy Tengler, Tesla owner and money manager.