Musk turns to retail politics to secure his massive pay package: Morning Brief
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Sometimes even iconoclasts need to be nice.
To rally support for his $56 billion pay package, which a court recently overturned, Tesla (TSLA) CEO Elon Musk is giving a group of shareholders an intimate tour of Tesla’s Gigafactory.
The political niceness comes ahead of a crucial vote and annual meeting on June 13 that will be seen as a referendum on his leadership.
But the election dispute highlights a fundamental tension in the ongoing drama surrounding Musk and Tesla.
Musk has threatened to pull major AI initiatives outside the company if he doesn’t gain enough voting power to guide the company’s decisions. But since that threat earlier this year, he has gone all-in on Tesla’s AI strategy, focusing on autonomous driving technology as the key to Tesla’s growth and identity.
The company is worthless without autonomous technology, in Musk’s view. But this is also a transparent threat that it will also be worthless without it.
As Musk reiterated during Tesla’s latest earnings call: “We should be viewed as an AI robotics company. If you value Tesla just as a car company – it’s simply the wrong structure.”
It’s the classic argument we’ve seen played out over the last decade, like Dominos insisting it’s a technology company, not a restaurant chain. And for good reason: Tech companies get the highest valuations.
An analysis of Tesla’s market value compared to traditional automakers confirms this, as does the enthusiasm and loyalty that motivate Musk’s devotees. He’s clearly not just selling cars.
But if you accept Musk’s “beyond automobiles” thesis, you will also be subject to his “excessive” compensation and capitulation to his whims. The preacher wants his tithe.
In a recent interview with Yahoo Finance, Nvidia (NVDA) CEO Jensen Huang said he believes Tesla’s fully autonomous system, which is powered by Nvidia chips, is the most advanced system available, “way ahead” in technology. category.
In this light, the vote on the pay package is not just about how many billions Musk deserves, but whether shareholders want to keep him interested in Tesla — a serious question for the CEO with half a dozen companies to run.
On Sunday, Musk’s AI startup xAI announced it had raised $6 billion at a $24 billion valuation. If Tesla’s vote fails and a dejected Musk picks up his AI-infused ball and goes home, we know where he’s going.
But Musk has a fandom he can also trust, from Tesla influencers and responders rallying support to reinstate the payment package. Tesla was a meme stock before GameStop. About 44% of Tesla’s common shares are held by non-professional shareholders, including retail investors, according to S&P Global Market Intelligence. This is the highest percentage among the 10 largest companies in the S&P 500.
“Don’t waste time, vote today!” Tesla insists on its website, offering the chance to win a tour of Austin with Musk. As the votes are tallied, your salary package comes into play. But what he really seeks is loyalty.
Hamza Shaban is a Yahoo Finance reporter covering markets and economics. Follow Hamza on Twitter @hshaban.
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