- 12 hours ago
Category
🗞
NewsTranscript
00:00Who are you meeting with and what thus far has been the response been to this pay package that
00:04could see Elon paid as much as a trillion dollars, Robin? Well, thank you for having me today. Yes,
00:09as part of our annual shareholder meeting, I meet with the top investors in Tesla on the
00:18institutional side and obviously also talk to retail investors through forums like this this
00:25morning to encourage everybody to vote, but also to answer any questions that they have.
00:31From a board perspective, we really like to engage with our shareholders, understand their
00:37questions, their concerns, their optimism for the future. And so it's a really important part of
00:43the process we go through on a quarterly basis, but also with the proxy on an annual basis as well.
00:50So the initial feedback, is it one of optimism around the pay package? We've heard from
00:56Glass-Lewis, from ISS, which have said they're not in agreement with the way in which the pay
01:01package is thus formed. The key concern seems to be the sheer amount of money going to Elon Musk,
01:07if indeed he achieves all of those key milestones. But for you, it's about, and for Elon, influence,
01:14it seems like. So how are you managing to discuss that with the investors, institutional and retail?
01:19Yeah. So firstly, it is a performance package. So he gets nothing if he doesn't perform against
01:25the pretty audacious milestones that are part of the performance criteria that's been outlined by
01:32the board in the performance package. So I think rather than compensation, it's actually about
01:41the performance and the goals that we have for the company as we move forward. And so for me,
01:46it really is about making sure that investors understand that, that they actually get paid
01:53if he hits the milestone before he will. But to your point, it is about voting influence.
02:01Elon's been very public, including on last week's earnings call, about the fact that it's around
02:06the voting influence that he could have in future shareholder meetings, as opposed to the economic
02:14interests of the shares that he would get as part of the performance plan.
02:22Robin, good morning from Washington, DC. You've acknowledged that there is a very real risk that
02:28Elon leaves if the vote is a no. The question we get most often from shareholders to you is what's
02:36the plan B? Either is there a plan B as a different person stepping up? Or have you discussed
02:43with Elon the idea that it will result in a no vote and that you can use some kind of bridging
02:49mechanism another interim pay award, for example? Well, he's been quite public in terms of the
02:58implications of a no vote being on his leadership as well as on the, obviously, on the performance
03:05plan itself. And so from our perspective as a board, we obviously take our fiduciary responsibilities
03:13really seriously to all shareholders and having, you know, a succession plan, you know, those types of
03:20things, the things we've discussed on an ongoing basis, particularly, you know, if something
03:27untoward were to happen. So from our perspective, succession planning is an important part and so much
03:34so that we've actually baked in an orderly succession plan, a plan for a plan, if you like, as part of this
03:40performance plan. So the last two tranches of the, of the performance plan are unlocked by having a,
03:48a robust performance plan that, sorry, succession plan that Elon would be part of.
03:56If Elon Musk walks away from Tesla on November 6th or 7th because of a no vote, is there a contingency
04:03where there is an individual already within Tesla or an individual outside of Tesla that is lined up
04:09as, as a, as a near term option? Yeah. So from our perspective, the most important thing at this
04:15point in time is making sure that we're explaining, um, all of the items on the shareholder, um, agenda
04:22for the annual shareholder meeting, um, making sure that, uh, institutional investors, um, retail investors
04:29have their questions answered. That's our most important thing right at this point. And we are only
04:34Robin, that is their question. Who's the backup plan is the question that they're asking you.
04:38Well, there is no other person, uh, that is Elon. Uh, we think that he is the right leader for,
04:45um, the company over this next, uh, decade, um, and delivering the plan and the opportunities
04:50ahead of us. So it's about how do we, uh, create the most value for the company and for our shareholders
04:56over this next period of time. And he, he is the right leader for us over this next decade.
05:01Can you give me a sense of probability if the vote is no, what probability Elon walks?
05:07Uh, so, so right at this point in time, uh, it's too early to actually make a call on the
05:13outcome. Um, most, uh, investors wait to the last minute to vote. Um, so we're still early
05:19in that cycle, which is one of the reasons why I'm in New York to meet with our, uh, institutional
05:24investors. Um, and, uh, we will get a better sense, uh, you know, as the votes come in. Um,
05:30and some, uh, institutions are more public than others, uh, in terms of how they're going to, uh,
05:36vote. Um, so yesterday there was a public announcement by the pension fund in Florida. Uh,
05:42and so other investors will start to, um, make their, um, their votes public as well.
05:49But if it's no, the probability that Elon goes a hundred percent.
05:53Well, um, time will tell, but he's been very, um, very public in terms of, uh, you know, it would be,
06:00um, uh, more of a, uh, say on his leadership over this period of time, not just about the performance
06:06plan itself in terms of, uh, um, uh, a no vote. Yeah.
06:10Robin, you've been generous with your time. You know, we've already spoken with you in September
06:15at length about the goals that you've set for Elon Musk. But one of the things that came out of that
06:20from, again, the shareholder base is why are the energy products not as strictly mandated to Elon?
06:27When you consider the earnings that just posted, that was a growth driver, right? It's such a key
06:32part of Elon Musk's, uh, master plan part four and, and this abundance that he's going after.
06:39So why didn't you include energy, um, products as, as a stated goal?
06:44Yeah. So, um, there are many different, uh, goals that we looked at. Uh, energy is an important part
06:50of the, um, the Tesla, uh, product lineup today and in the future. Uh, and you can see, uh, the impact
06:57that energy is having not only on the results, but also on, uh, the transition, uh, to sustainable
07:04energy, um, longer term. Uh, so it is embedded in the plan. Uh, the EBITDA goals that we have
07:10as a company, um, you can't get there without a robust, um, uh, energy, um, outcome. And so,
07:18again, if you look at the results of last week, energy contributed very significantly and to
07:22get to $400 billion of, uh, adjusted EBITDA is a, is a monumental task for anybody. Um, no one out
07:31there, at least to my knowledge is, is, um, um, at that sort of level. And so even the, the first
07:37EBITDA goals at $50 billion is nearly three times our highest, uh, EBITDA goals that we've had. So from
07:45our perspective, uh, it is absolutely embedded in the goals. Um, uh, to your point, it's not a
07:52specific line item in terms of the revenue or the, uh, units or the kilowatts of energy or
07:58megawatts of energy that are out there, but it is, uh, implicit in the plans. Uh, and the master
08:03plan for, um, you know, talks about that as well in terms of, uh, getting to sustainable abundance.
08:10Robin, has the special committee and the advisors that you took on discussed
08:14the use of interim awards in the event of the no votes and how you might replicate what you did
08:21already? Well, um, there's an important, uh, other measure on the board as well, proposal in terms of
08:28increasing the, um, uh, uh, the, the share pool that we have firstly for our employees. Um, as you know,
08:35we're in a talent war, uh, at the moment, particularly around AI talent and, uh, adding to the, um,
08:42employee reserve, uh, as, uh, part a of that, um, to actually increase the amount of equity that we
08:51have for our employee program. Uh, but secondarily, we've also asked shareholders to, um, add to the
08:57pool, uh, in the event, um, that we need to, uh, award, um, an amount, um, to Elon, um, uh, to compensate for
09:07the 2018 plan. Um, because as you know, we put an interim award for roughly one third of, uh, what he
09:14earned under the 2018 plan, uh, given, um, the, uh, appeal that is ongoing, uh, in Delaware at the
09:21moment. So, um, so we have not ruled that out. Uh, the special committee was charged with looking at
09:27all matters compensation wise. Um, as you're aware, in August, we did actually an award, a, um, an interim award,
09:35which does have a two year vesting period and is forfeited if we win the, um, appeal in Delaware
09:42for the 2018, um, compensation program. It does seem then to be about money. And I'm interested
09:51as to how you continue to, you've made very clear it's about influence as well. Some of the feedback
09:56has been just a gargantuan amount that could go to Elon in terms of monetary value, but then others
10:00are worried about the dilution to other shareholders. How was it in just no way possible
10:06to give him more voting rights without the $1 trillion mega money bonus? It feels like.
10:11Yeah. I mean, we looked at many different instruments to be able to award equity, um,
10:17that had voting rights versus, uh, the economic value. And it's just not possible once a couple
10:22companies has gone public to introduce, um, a special class of voting shares. Other companies
10:29have that. Uh, if you look at some of the tech companies, um, they have two classes and, and
10:34founder shares, if you like, or special voting rights exist. But for Tesla, that wasn't implemented
10:40at the time that we actually went public and therefore, um, we weren't able to use that type
10:46of instrument. But what we were able to do was to bifurcate, um, the voting rights versus
10:52the economic rights. And so, um, under the plan, um, the first, uh, the, all the awards have
11:01voting rights that are earned first, uh, and then the economic rights happen, um, you know,
11:06seven and a half years later in the first instance or 10 years later. So it really isn't about the
11:12economic or monetary value. It's more about the voting rights. And if there was a different
11:17mechanism that was available to us, we, we may have used that. Um, but we had many experts look
11:22at it over, um, uh, an extensive period of time and we were not able to, um, to come up with
11:30something that would enable us to do that. We are speaking with Robin Dunholm, chairperson of the
11:35Tesla board of directors, of course. And Robin, what's so interesting is Elon's made very clear
11:39why he wants influence. And in the earning school, he was saying he's worried about this army of
11:43robots that he is creating and then not having the influence. If something went untoward, his
11:49concerns about AI have been well-documented, but why is he the right person to have influence,
11:56to have more than 20, 25% vote in control? I think there's not another person on the planet
12:01that has the skillset that Elon has, uh, both in terms of, uh, the manufacturing prowess that we've
12:09developed and he has developed over many years, but also around AI, that, that confluence of those
12:15technology skills. I think there are very few people that have the, for that, that, and therefore,
12:21obviously, um, uh, looking at the, the risks associated with new technologies and technology and
12:28risks that haven't even yet emerged around those technologies. I think he is the right person,
12:33not only to take advantage of the opportunities for the company ahead of us, but also to make sure
12:38that there are, um, not the pitfalls of, uh, new technologies that could happen. Uh, obviously,
12:44the board plays a role in that as well. And as from a governance perspective, looking at, um,
12:50the types of evil that could be, um, uh, done with different types of technology is part of our
12:56purview as well. Um, and it is why we have such a phenomenal, um, board with the skillsets that we have,
13:03um, both from a technology perspective, but also from a governance perspective. And so we play a
13:08role, but obviously the CEO, the management team play an even bigger role on safeguarding,
13:14um, companies and safe, safety is a huge priority of ours as a company. And so, um, when you're
13:21developing new technologies and technologies that other, um, people have not yet developed globally,
13:28um, it is important to make sure that you have the right framework in place.
13:32Robin, final question from the shareholder base is, did the situation around the 2018 package,
13:40chancery Delaware situation mean that the board had to hold off on authorizing any other investments
13:46or big strategic shifts? Uh, no, I don't think so. I mean, obviously we take into account a whole
13:52bunch of, um, factors as we're working through, uh, strategy and, um, and different alternatives.
14:00The company has ahead of us. Um, but, uh, but, uh, clearly, um, uh, the Delaware situation
14:08was disruptive, but not disruptive from a strategic point of view. Um, making sure that we, uh,
14:15have a, have an eye on the future and, and the evolution of the company over the long term,
14:20I think, um, is something that the board is focused on, but also something the management
14:24team is focused on.
Recommended
1:25
|
Up next
2:10
2:22
6:24
3:52
4:05
19:22
4:28
7:24
4:55
5:27
Be the first to comment