Next month, Elon Musk intends to take fifteen shareholders of Tesla on personal tours of Tesla’s factory; these are the shareholders who voted on Musk’s USD 56 billion worth pay package. This comes close as Tesla escalates efforts to seek approval for the compensation structure after it was struck down by a court. The result of the vote that is expected to be announced at the annual shareholders’ meeting on June 13 is considered as the litmus test of Musk especially in the backdrop of investors’ worry over his commitment to Tesla and the way his controversial remarks have affected the image and sales of the company.
The board has defended Musk’s hugely incentive-laden compensation plan as pivotal in guaranteeing his loyalty to Tesla over other ventures. They have been encouraged to re-endorse the 2018 pay package that was overturned by a judge who stated that the directors were overly-biased by Musk when negotiating the terms of remuneration.
“Don’t wait. Vote now!” Tesla encouraged the community on Tuesday. Musk and other Tesla executives are to host factory tours and introduce production lines for the Cybertruck and Model Y in the Texas site on June 12, the eve of the annual general meeting. Nell Minow, for instance, the vice chair of ValueEdge Advisors, describes this strategy as a desperate attempt to woo the ‘small fry’.
Currently, 44% of Tesla’s common stock is owned by the retail investors as rated by S&P Global Market Intelligence; this percentage is the highest among the top 10 companies of the S&P 500. However, there are still a number of people who exercise caution even with Musk’s attempts. “It seems to be highly delusional that he imagines that his appearance will influence the decisions,” commented one observer.
Glass Lewis & Co LLC advised the shareholders of Tesla Motors Inc not to approve the remuneration policy as Musk has several time-consuming responsibilities. Kristin Hull, the founder of Nia Impact Capital and a Tesla investor, also concurred with this assertion, she voted against the deal and argued, “His focus is clearly not just on Tesla.”
Elon Musk became the world’s richest person; He is the head of SpaceX; He bought Twitter in October 2022 and is the founder of the AI company, xAI which has recently secured financing of $6 billion. Currently owning 13% stake that could rise to 22% if he converts the stock options, Musk has obliged to start new AI projects outside Tesla if he does not get the 25% voting rights figure linked to the disputed remuneration plan. The possibility of moving R&D center to another location could be detrimental to Tesla since its value is based on the AI technology for autonomous cars, a field which Musk said the company would be “worth basically zero” without.