Tesla Approves Musk Pay, Board to Review xAI Investment

Bloomberg

Watch Tesla Approves Musk Pay, Board to Review xAI Investment - Bloomberg on Dailymotion

Transcript

00:00Alexandra, this paves a way for Elon Musk to take his stake in Tesla to 25% over the course

00:07of the 10 years. Could you just explain what the sentiment was like last night into this morning

00:13about how comfortable investors feel handing over that control to Elon Musk and the belief

00:19that you do or do not have that he can hit the milestones that have been set for him by the board?

00:24Oh, I'm very confident that he will hit the milestones. He's shown us before what is possible.

00:31Nothing's never easy. But if you set goals to Elon, he's very competitive. He's obviously,

00:38in my views, the best executor there is on this planet, and he will execute. So that's not the

00:45question. The question is whether we would get sufficient retail and institutional shareholder

00:50support. And we sure did. 75% is astoundingly high. It is higher than the previous compensation

00:57packages, votes and re-votes in 2018 and 2024. So this was a clear victory. I am so grateful for

01:05everybody who voted. I would like to see the 25% that voted against it, because how can you be

01:12against this if you are a shareholder? But that's another topic. For example, we had the investment

01:18director of CalPERS on the show yesterday. CalPERS voted no. And the rationale was that in aggregate,

01:25they saw Elon Musk and board members already having 16% of the company. And the issue of key man risk.

01:33So if Musk does get there, right, and achieves 25% stake, what if something happens to him? Or what if

01:41something distracts him? XAI, SpaceX, for example. That was the concern they had. Why don't you share the

01:47concern? Well, first of all, that's the same concern at 16% or 25%, right? So that CalPERS argument

01:55is just non-existent, even though it's a nice word salad. There is no doubt in my mind that that's what

02:02they try to do. It's not an issue about whether he as a key man is a risk to Tesla. He is. The same way

02:11he is the key person. He is also the key man risk. That is just a fact. And actually part of the

02:18structure of this compensation plan addresses that as the last two tranches are linked to a succession

02:24plan, to a more formal succession plan than what is currently in place. So 16 or 25%, that's not a

02:30question. But at 25%, Elon is sufficiently strong to prevent activist shareholders trying to take over,

02:39bringing board members in that are not aligned with Tesla's mission. And I think that is the key

02:44point. Retail has always stood with Elon and has always been very active, knows what this company is

02:51about. So that is not the concern. But it is institutional funds that are in Tesla, despite the

02:58fact that they don't really like the company, don't understand the company, vote against interest of

03:03the company. And that can become stronger just by the pure mechanism of index funds, of political

03:09activism. And he wants to make sure that that can be prevented. And he's right. And the fact of being in

03:14Texas helps a lot. But him getting to 25% obviously is a good shield. But that's exactly the worry, is that he

03:22does get the 25% control and can fend off activism that might be in some way trying to course correct

03:31as others feel outside of Tesla. Why is that? You're saying it's a word salad. But for many,

03:37that's exactly the fear that he has control over what he calls a robot army.

03:43I understand that. I understand that there is a fear. But ask those activists, what is their idea

03:51about Tesla? What is their idea about a better world? They never talk about that. They talk about

03:56the fact that they fear Elon is too powerful. They never talk about what Tesla is all about. I never

04:02hear a CalPERS or God forbid, a Klaus Lewis ISS or the New York Comptroller talk about the mission of

04:11Tesla, talk about where Tesla is going. And, you know, I rather as a shareholder have Elon's have the

04:18keys to an army of bots than anybody else, including the four companies I just mentioned.

04:24We'll put that to CalPERS. I feel that he in many ways was trying to articulate that they are about

04:29the long term vision, whether it's about electric vehicles, whether it's about supporting the climate,

04:35whether it's about humanoid robots. They just don't think that perhaps another CEO couldn't achieve

04:41really significant, phenomenal growth for this business, even if it wasn't Elon Musk. Why is he

04:46alone the only person who could meet these milestones and drive Optimus to be on the moon,

04:53on Mars? I mean, that seemed to be the next area of growth. Was that what you wanted to hear,

04:57that we're going to have Optimus doing surgery, but also eventually going to Mars?

05:01Yes, we sure do. We sure want to hear that. We also were

05:05absolutely excited thinking about chip manufacturing. I don't think that has really gotten through yet to

05:10the press. And I hope Bloomberg is going to talk about it. If Tesla goes into chip manufacturing,

05:15can you imagine? So I would like to ask CalPERS, show me, show me one other CEO who did even half of

05:22what Elon has accomplished. If you show me one where you have the feeling that that person could do

05:29something even comparable, I'm ready to sit down and discuss it with him. But we've got to wait for a long

05:34time. Right. Alexandra, I would push back a little bit because I wrote the story about Elon's comments

05:39from the earnings call about clarifying the Samsung TSMC relationship. And I sent the headline last night

05:46about his comments on chip manufacturing. So I'm going to look into it. I need to ask you about XAI.

05:53You were in the room and we're waiting on the 8K. What appeared to happen was Brendan Earhart,

05:58the corporate secretary say there were more for votes than against, but a very large number of

06:03abstentions. And so they're basically reserving the right to wait. Look at the non-binding proposal

06:10and go back to it. Is that your understanding of where things stand and also just your reaction to

06:15it? Because you were involved in the process of getting that proposal on the docket. Yes. Yes. Well,

06:21thank you very much. Yes. Very good question. And as you point out, we haven't seen the 8K yet,

06:25so I don't have the underlying numbers, but I know exactly what happened. The board's recommendation

06:31was neutral. They did not give a recommendation. Lots of retail shareholders just follow blindly

06:39the board's recommendation. So by going after the board's recommendation, instead of voting none,

06:44they abstained. That is the logical way. And that's actually how it is automated. We had this issue with

06:49a Norwegian bank who gave their shareholders only a certain limited number of options to vote. And

06:55then the shareholders from Norway, which are very numerous in Tesla, could not vote for question

07:00six. They were abstaining. So abstaining was also just a consequence of the way the proxy was laid

07:07out. And there was no better choice. It was a bad choice to not be able to give a guidance,

07:12but there was no other choice because what the board is trying to do here, and we have to understand why

07:17that is, is to stay out of it until they get a clear mission from the shareholders. And why are

07:24they doing that? Well, because it is a conflicted situation. Elon is the key man in both XAI and Tesla,

07:29and as SolarCity has shown us, it is always difficult to invest from one company A into a company B that are

07:37both led by the same, by the same key person. So the board tries to stay out of it until there is a clear

07:43mission. Now, we have to see the 8K numbers to understand whether this is now a clear call from

07:48shareholders to do it. If there were so many abstains, it may not be. But you also have to know that

07:54this shareholder proposal number seven was always only advisory. It was never that this vote would

08:00have been an automatic investment. If the board now convenes that they want to invest, we will certainly

08:06have another shareholder vote on the exact proposal of investment, not just on the general idea.

Category

Transcript

Be the first to comment

Recommended