The CEO of Tesla, Elon Musk, said that he would be “uncomfortable” growing the company into an AI and robotics powerhouse without at least 25% voting control—nearly twice his current holding.
Musk stated on Monday on X, the social networking site formerly known as Twitter, that he would like to work on products outside of Tesla unless he could get a stake in the world’s most valuable automaker that would give him “enough to be influential, but not so much that I can’t be overturned.”
According to governance experts and analysts, Musk’s threat to develop AI and robotics outside of Tesla, unless he gains more voting control, could violate his responsibilities as CEO.
I should note that the Tesla board is great. The reason for no new “compensation plan” is that we are still waiting for a decision in my Delaware compensation case. The trial for that was held in 2022, but a verdict has yet to be made.
I put “compensation plan” in quotes,…
— Elon Musk (@elonmusk) January 15, 2024
Although he has consistently advocated for Tesla’s prototype humanoid robots and its semi-automated “Full Self-Driving” software, the electric vehicle manufacturer’s primary source of revenue remains its automotive division.
Adam Jonas, an analyst at Morgan Stanley, predicted in September that the Dojo supercomputer, used by Tesla to train AI models, could add about $600 billion to the company’s market value by speeding up its foray into software services and autonomous vehicles. He also advocated for this technology.
Since the beginning of the month, Tesla’s stock has declined by more than 11%. On Tuesday, the stock rose 0.5%. Elon Musk, the wealthiest individual in the world, presently possesses approximately 13% of Tesla stock. To help pay for his $44 billion purchase of Twitter in 2022, this sum was decreased by billions of dollars.
In a separate X post, he stated that he would be content with a dual-class share structure to obtain 25% voting control, but following Tesla’s initial public offering he was informed that this was impossible.
Waiting for the case to be decided
— Elon Musk (@elonmusk) January 15, 2024
He remarked, alluding to Facebook founder Mark Zuckerberg, “It’s weird that a crazy multi-class share structure like Meta has, which gives the next 20+ generations of Zuckerbergs control, is fine pre-IPO, but even a reasonable dual-class is not allowed post-IPO,”
A company with a dual-class structure will issue at least two different kinds of shares, each with its own set of voting privileges. More voting power is usually given to founder or early-stage investors and less to other shareholders.
A lawsuit has been filed against Musk regarding his compensation package. In 2018, Tesla shareholder Richard Tornetta initiated legal proceedings against Musk and the board, alleging that the co-founder exploited his authority over the board to secure an excessive compensation package, without being obligated to put in full-time effort at the electric vehicle manufacturer.
No feud or battle at all. The Tesla board is excellent.
— Elon Musk (@elonmusk) January 16, 2024
On X, Musk denied a “feud” between the board and himself over his new pay package, claiming that talks had stalled due to the impending verdict.
