Electric vehicle manufacturer Tesla has made headlines twice recently after proposing two gargantuan compensation packages for CEO Elon Musk despite a yearslong lawsuit brought by an investor who believes its board of directors sought to overpay Musk.
According to Teslarati, a former Tesla employee raised objections to the board's newly proposed pay package on X, drawing an irate response from Musk himself.
What's happening?
In September, Tesla drew up a package worth as much as $1 trillion.
In a laudatory letter to investors, the board justified the sum as necessary to "retain and incentivize Elon to focus his energies on Tesla" and insisted Musk's "singular vision" was critical to the brand amid intermittent sales slumps.
On Oct. 18, a former Tesla engineer retweeted a tweet by Tesla (@tesla) addressing the compensation debate. The user pointed out that the financial advisory firm Institutional Shareholder Services suggested against approving the package and concurred.
"As a fan, I love Tesla, I want it to succeed. As a shareholder, I don't want Tesla to overpay for its CEO," the post said.
"I strongly believe that the 2025 pay package proposal would overpay for its CEO, and that other competent CEOs could grow Tesla just as much with way less political drama and cost investors much less than this proposal," he added.
Musk directly replied, tweeting back: "Tesla is worth more than all other automotive companies combined. Which of those CEOs would you like to run Tesla? It won't be me."
Why is this conflict important?
Controversy over the board's proposed pay and Musk's response did little to assuage investors' fears that its CEO was prone to impulsivity and shortsightedness.
Teslarati commenters pointed out that Musk's assertion regarding Tesla's value was debatable; Tesla's market cap is the highest in the industry, but Volkswagen, Toyota, and many others have more revenue, as Investopedia showed.
TCD Picks » Upway Spotlight
💡Upway makes it easy to find discounts of up to 60% on premium e-bike brands
|
Who should be paying for space exploration? Click your choice to see results and speak your mind. |
The government 🏛️ Musk's response also reinforced commenters' belief that his behavior and public image were too great a liability.
"This is the guy who fired the WHOLE Charging Division," one user replied, referencing recent history. "There's clearly been a change in his mental capacity."
"Should he be running any company, with this level of judgment?" another reader remarked.
A third person cited Musk's statements about Tesla's purported valuation as an indication he wasn't capable of responsible stewardship. "This nonsense is exactly the problem. Tesla isn't worth more than all other car companies by any rational standard. Meme stock valuation is completely disconnected from reality," they said.
As several observed, Musk's actions impact Tesla's fortunes, and his volatile behavior could discourage drivers from making their next car an EV, potentially harming EV adoption.
What's being done about it?
On Oct. 1, CNBC covered a Take Back Tesla campaign encouraging shareholders to vote against Musk's proposed compensation.
Tesla's annual shareholder meeting and the vote are scheduled for Nov. 6.
Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Cool Picks
