Tesla’s Chairwoman of the Board, Robyn Denholm, says that voting for Elon Musk’s compensation package of up to $1 trillion is essentially voting for Tesla’s future.
She insists only Elon Musk can make this future come true without ever explaining why.
Tesla’s board is virtually always silent. They rarely, if ever, comment about anything unless it’s time to get Elon Musk paid.
Then, they, especially chairwoman Robyn Denholm, come out of their cave to sell to shareholders that Elon Musk, the wealthiest man in the world and already the biggest Tesla shareholder, should receive the biggest compensation package ever – beating the next biggest by a factor of 10.
They recently gave Musk a $29 billion package without obtaining shareholder approval, and now they are proposing a new one that could be worth around $1 trillion in stock options for Musk if all the milestones are met.
Denholm, who rarely, if ever, gives interviews, is now making the rounds to try to sell the package to shareholders.
Tesla’s board is even buying Google ads to sell the package for shareholders, despite the automaker rarely using advertising to sell its own products.
In an interview with Bloomberg, Denholm claimed that Musk is the only one who can execute Tesla’s mission, and they believe that even though he is the single person who benefits the most from Tesla’s stock right now, he still needs to be motivated with more stock options:
AI and autonomous is at the front and center of that, both in the vehicles but also in our Optimus lineup and what we’re doing from a robotics perspective as well. And so, having the Board’s responsibility is to look at who the CEO is for the next period of time, and we believe that Elon is the right CEO for Tesla over this transformative period of time. And our view is he’s a generational leader – there aren’t any other people out there like Elon who can actually lead the Company over this next decade or so. And so, once you decide who the leader should be, you need to put in place the compensation package to incent and motivate him to actually deliver against the ambitious goals.
When asked about Musk’s political activities, Denhom basically said that it is not the board’s business and they only judge him on the company’s performance:
Yeah, I mean, what he does from a personal perspective in terms of his political motivations, et cetera, is up to him. Clearly, from our perspective as a Board, we’re measuring him on results and measuring him on what he does as the CEO of Tesla. Our view is he’s delivered big time in the past, and we look forward to him doing that in the next era.
However, she didn’t explain what he has delivered lately.
Tesla’s vehicle sales have been in decline for two years now. Earnings have been dropping for three years. Tesla’s autonomous driving effort is years behind where Musk claimed it would be since 2018.
The only thing that is up is Tesla’s stock, and it appears to be up on people believing what Musk is claiming, despite a long history of being consistently wrong.
Yet, Denhom insists that voting for Musk’s compensation package is a vote on Tesla’s future:
I think the really key thing is that shareholders get to vote on the future of the Company, not just on a compensation package. The compensation package is the instantiation of the goals and ambition – the super ambitious goals that we have as a company. So, I think with this proposal, it’s really up to shareholders what the future of Tesla looks like.
Tesla shareholders will vote on November 6 at the annual shareholders meeting.
Electrek’s Take
The board has been selling hundreds of millions of dollars’ worth of Tesla stock over the last year.
They want to give Elon Musk ridiculous compensation because he also allowed them to give themselves excessive compensation, to the point where they had to settle with shareholders and return almost $1 billion worth of excessive board compensation. It’s pathetic.
It’s all about greed. It’s no longer about the mission.
Forget about the clear fact that Tesla’s CEO is losing his mind and using his platform to stoke political violence almost as a full-time job for the last 2 weeks, the compensation also doesn’t make sense on a purely sensible basis.
Musk is being greedy compared to the average human, but he is also being greedy on a billionaire scale.
In comparison, Jeff Bezos never took stock options during his tenure as CEO of Amazon because he was already fully motivated to perform at the company, as he stood to benefit the most from the stock:
Musk is in the same situation, but he apparently needs another trillion-dollar worth of stock to be motivated.
If the problem is the control of the company through his stake, which is obviously nonsense as he has complete control over Tesla with just 15% of the share, Tesla could do the same as Ellison with Oracle:
Ellison managed to increase his ownership of Oracle through share buybacks that helped shareholders instead of diluting the stock like Musk’s compensation package.
In short, there are numerous ways to achieve what Musk claims to accomplish while benefiting all shareholders equally, and him more proportionally as the biggest shareholder, but he chose to push for the option that results in him getting a disproportional benefit.
That’s called greed. Pure and simple.
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