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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 salary package, which a court recently overturned,Tesla (TSLA) CEO Elon Musk is offering a group of shareholders an intimate tour of Tesla’s Gigafactory.
The political jubilation 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 does not obtain sufficient voting power to guide the company’s decisions. But since that threat earlier this year, he bet everything on Tesla’s AI strategycentering autonomous driving technology as 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 believe Musk’s “beyond automobiles” thesis, you are also 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 the category.
In this light, the vote in favor of the salary package is not just about how many billions does Musk deserveBut whether shareholders want to keep him interested in Tesla – a serious question for the CEO with half a dozen companies to manage.
On Sunday, xAI, Musk’s AI startup, announced that it raised US$6 billion on a Valuation of US$24 billion. If Tesla’s vote fails and a dejected Musk picks up his AI-infused ball and goes home, we know where he’s going.
The story continues
But Musk has a fandom he can also trust, from Tesla influencers and responders rallying support to reinstate the pay 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, with 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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