Elon Musk, chief executive officer of Tesla Inc., during a fireplace discussion on artificial intelligence risks with Rishi Sunak, UK prime minister, not pictured, in London, UK, on Thursday, Nov. 2, 2023.
Tolga Akmen | Bloomberg | Getty Images
Tesla and SpaceX CEO Elon Musk, who also owns the social network X (formerly referred to as Twitter), said Monday that he wants about 25% of voting control over his electric vehicle business.
Musk already owns around 13% of Tesla, or roughly 411 million shares of the corporate’s 3.19 billion shares in common stock outstanding, as reported in the corporate’s last financial filing for the third quarter of 2023.
That is a big stake, especially considering that Musk sold tens of billions of dollars price of his shares in Tesla in 2022, largely to finance a $44 billion leveraged buyout of Twitter.
Now, Musk is angling for much more control over Tesla.
Specifically, Musk wrote on Monday, “I’m uncomfortable growing Tesla to be a pacesetter in AI & robotics without having ~25% voting control. Enough to be influential, but not a lot that I can not be overturned.”
“Unless that’s the case, I would like to construct products outside of Tesla,” the billionaire executive said on X.
“You do not seem to grasp that Tesla just isn’t one startup, but a dozen. Simply have a look at the delta between what Tesla does and GM. As for stock ownership itself being enough motivation, Fidelity and other own similar stakes to me. Why don’t they show up for work?”
Tesla didn’t immediately reply to a request for comment.
Musk’s post stood at odds with remarks he previously made suggesting Tesla is already a crucial AI and robotics company, and its value hinges on its prowess in these domains.
In April 2022, Musk predicted during Tesla’s first-quarter earnings call that the corporate’s humanoid robot, Optimus, “ultimately will probably be price greater than the automotive business and value greater than full self-driving.”
Tesla unveiled an early Optimus prototype at Tesla AI Day in September that yr, and Musk said in a post around that event: “The purpose of AI Day is to point out the immense depth & breadth of Tesla in AI, compute hardware & robotics.”
More recently, on Dec. 27, 2023, Musk criticized Roth Capital senior research analyst Craig Irwin who appeared on CNBC’s Closing Bell Time beyond regulation, saying he thought Tesla was “egregiously overvalued,” especially in comparison with Japanese autos giant Toyota.
Bristling on the comparison to a big competitor that has sold more hybrid electric vehicles than battery electric models, Musk said in a post on X, “He has the unsuitable frame of reference. Tesla is an AI/robotics company.”
While Tesla’s last annual or 10-K filing showed that around 95% of its revenue got here from its “automotive” segment in 2022, in its third-quarter 2023 financial filing, the corporate described its business as “increasingly focused on services based on artificial intelligence, robotics and automation.”
Even on Monday morning, Musk posted a video clip on X showing the Optimus robot in development folding laundry at a table, although the robot was remote-operated and never autonomous.
Musk’s wish to manage much more of Tesla will undoubtedly add to the pressure on Tesla’s board of directors in 2024.
Along with determining appropriate CEO and director compensation, Tesla’s board is already facing some investors’ concerns over several issues.
Some investors and lawmakers have expressed concerns over: Musk’s split focus and use of company resources as he continues to run SpaceX, X Corp. and other ventures alongside Tesla; his divisive political and cultural commentary, including recent tweets disparaging corporate diversity and inclusion initiatives; federal probes involving Musk and Tesla; and worries over drug use by the CEO, recently reported by Wall Street Journal.
Musk can also be within the midst of a trial in Delaware over his earlier $56 billion pay package from Tesla. The unparalleled 2018 CEO compensation plan made Musk into considered one of the richest people on the planet.
Shareholder Richard J. Tornetta has sued Musk and Tesla, alleging the CEO’s compensation was excessive and its authorization amounted to a breach of fiduciary duty by Tesla and its board.
Musk also noted on Monday that Tesla’s board of directors is waiting to ascertain a latest compensation plan for him until the Tornetta case is set within the Delaware chancery court.
He wrote: “The rationale for no latest ‘compensation plan’ is that we’re still waiting for a choice in my Delaware compensation case. The trial for that was held in 2022, but a verdict has yet to be made.”
Referring to his call for 25% voting control, he said: “If I even have 25%, it means I’m influential, but could be overridden if twice as many shareholders vote against me vs for me. At 15% or lower, the for/against ratio to override me makes a takeover by dubious interests too easy.”
In an earlier trial in Delaware, several Tesla board members agreed last yr to pay back $735 million to the corporate in a settlement agreement over their very own director compensation.
