Elon Musk's Proposed Pay Package is At the Center of an Intensifying Game of Chicken

Chris Teague
by Chris Teague

Tesla has seen its ups and downs in recent times, though it has felt like more downs. Layoffs, temporary plant closures, and government investigations be damned, however, as CEO Elon Musk is determined to land his proposed record compensation package.

The Tesla board is tasked with voting on the pay package, which reaches an astonishing $56 billion. The consideration comes after a 2018 package was nixed in a Delaware court. Musk and the board both believe that they’d have fared better in a Texas courtroom, though a vote to approve the latest package doesn’t guarantee that there won’t be further legal battles, even in the Lone Star State.

While some shareholders are staunchly opposed to the deal, others have set out to influence opinions toward voting to approve. The board has a website on the topic and has been buying ads to sway voters. Musk’s fans have also made a lot of noise and have been trying to intimidate voters into approving the pay package.

In 2018, Musk said that he wouldn’t leave Tesla if the package wasn’t approved, but he also recently threatened that he would not create new AI technology for the automaker if he didn’t have at least 25 percent control of the company.

It’s unlikely that Musk would jump ship if the vote doesn’t go his way, but it’s clear Tesla needs a stronger, more independent board. Right now, it appears that the board is working with Musk instead of for the company, which is a bad look when Tesla is in such a transitional state.

[Images: Frederic Legrand via Shutterstock and Tesla Motors]

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Chris Teague
Chris Teague

Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.

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  • Jeffrey Jeffrey on May 29, 2024

    Elon Musk is a questionable leader. His leadership style doesn't build trust with his employees and it slows innovation and development. His focus should be on people, product, and customers not himself. The competition in this area is fierce and Tesla's products look tired and repetitive their sytle language is no longer innovative or industry first.

    • Jeff S Jeff S on May 29, 2024

      In other countries except for the US Chinese manufacturers like BYD are outselling Tesla. Tesla is no longer the only EV maker and without change to their products they will continue to lose market share. I do believe some type of compensation agreement should be reached but 56 billion is far too much. Musk thinks of Tesla as a tech company but in reality Tesla is a car company and should be operated as a car company. If Tesla were a true tech company they would be continually improving their product and they would not be selling basically the same product with few changes for years. Companies like Apple are technology companies because Apple continually comes out with new products and innovation. For Tesla to thrive and grow Musk needs to not be involved in the day to day operations of Tesla. The Cybertruck is an example of why Musk needs to not be the CEO. Most CEOs would never have given the green light to the Cybertruck.

  • Bd2 Bd2 on May 29, 2024

    Elon Musk is God and Lord Almighty. Amen.

  • 3-On-The-Tree I don’t think Toyotas going down.
  • ToolGuy Random thoughts (bulleted list because it should work on this page):• Carlos Tavares is a very smart individual.• I get the sense that the western hemisphere portion of Stellantis was even more messed up than he originally believed (I have no data), which is why the plan (old plan, original plan) has taken longer than expected (longer than I expected).• All the OEMs who have taken a serious look at what is happening with EVs in China have had to take a step back and reassess (oversimplification: they were thinking mostly business-as-usual with some tweaks here and there, and now realize they have bigger issues, much bigger, really big).• You (dear TTAC reader) aren't ready to hear this yet, but the EV thing is a tsunami (the thing has already done the thing, just hasn't reached you yet). I hesitate to even tell you, but it is the truth.
  • ToolGuy ¶ I have kicked around doing an engine rebuild at some point (I never have on an automobile); right now my interest level in that is pretty low, say 2/5.¶ It could be interesting to do an engine swap at some point (also haven't done that), call that 2/5 as well.¶ Building a kit car would be interesting but a big commitment, let's say 1/5 realistically.¶ Frame-up restoration, very little interest, 1/5.¶ I have repainted a vehicle (down to bare metal) and that was interesting/engaging (didn't have the right facilities, but made it work, sort of lol).¶ Taking a vehicle which I like where the ICE has given out and converting it to EV sounds engaging and appealing. Would not do it anytime soon, maybe 3 to 5 years out. Current interest level 4/5.¶ Building my own car (from scratch) would have some significant hurdles. Unless I started my own car company, which might involve other hurdles. 😉
  • Rover Sig "Value" is what people perceive as its worth. What is the worth or value of an EV somebody creates out of a used car? People value different things, but for a vehicle, people generally ascribe worth in terms of reliability, maintainability, safety, appearance and style, utility (payload, range, etc.), convenience, operating cost, projected life, support network, etc. "Value for money" means how much worth would people think it had compared to competing vehicles on the market, in other words, would it be a good deal to buy one, compared to other vehicles one could get? Consider what price you would have to ask for it, including the parts and labor you put into it, because that would affect the “for the money” part of the “value for money” calculation. An indicator of whether people think an EV-built-in-a-used-car would provide "value for money" is the current level of demand for used cars turned into EVs. Are there a lot of people looking for these on the market? Or would building one just be a hobby? Repairing an existing EV, bringing it back into spec, might create better value for the money. Although demand for EVs is reportedly down recently.
  • ToolGuy Those of you who aren't listening to the TTAC Podcast, you really don't know what you are missing.