Elon Musk has issued an ultimatum to Tesla shareholders ahead of a crucial vote on his $55.8 billion pay package. Musk stated that unless he holds 25% control over Tesla, the company’s AI and robotics initiatives are at risk. “Give me 25% of Tesla or you don’t get AI and robotics,” Musk said in a recent post on social media platform X. Currently, Musk owns about 13% of Tesla.
To reach the 25% threshold, he would need a substantial new compensation package or a new class of shares to be issued. The upcoming shareholder vote on June 13 will determine the fate of Musk’s 2018 compensation deal, which was previously rejected by a Delaware court. Tesla has been pushing for the approval of Musk’s pay package, arguing that it is essential for the company’s future focus on advanced AI technologies and self-driving software.
Elon Musk is treated like dirt in the USA. He should be treated well and supported to help benefit humanity. pic.twitter.com/732wBlJ9SZ
— Tesla Owners Silicon Valley (@teslaownersSV) May 27, 2024
Crucial vote on Musk’s pay
Musk has long maintained that Tesla’s value lies in solving autonomy and deploying it across a large fleet of vehicles. However, shareholder proxy service Glass Lewis has advised against approving the proposal, citing its “excessive” size and Musk’s numerous other projects. Many analysts also question Musk’s commitment to Tesla, given his recent moves to allocate resources to his AI startup, xAI. Musk’s ultimatum raises significant legal and ethical concerns about corporate governance at Tesla.
If you voted your TSLA shares, you have the chance to attend our Giga Texas tour with @elonmusk & @woodhaus2 as your guides → https://t.co/DrGCyD4xQN
— Tesla (@Tesla) May 28, 2024
The situation is unprecedented, with a CEO openly threatening to withhold critical products if he does not receive more control over the company. Tesla shares have been under pressure, falling approximately 28% year-to-date. Investors are worried about various headwinds, including fading EV demand, higher interest rates, and a lack of new model launches. The upcoming shareholder meeting will be a critical test for Musk and Tesla’s future direction.
