Musk Labels Critics of Historic $1 Trillion Tesla Compensation Plan as ‘Corporate Terrorists’

Musk Escalates Rhetoric Over Compensation Battle

Elon Musk has reportedly escalated his confrontation with advisory firms opposing his proposed $1 trillion Tesla compensation package, referring to them as “corporate terrorists” according to sources familiar with his comments. The billionaire’s characterization comes as he faces mounting opposition to what would represent the largest corporate pay package in history if approved.

Background of Compensation Controversy

The current conflict represents the latest chapter in a multi-year battle over Musk’s compensation at Tesla. Sources indicate that advisory firms Glass Lewis and ISS previously recommended shareholders vote against Musk’s $56 billion pay package last year. Although Tesla shareholders approved the package, the deal remains held up in court proceedings that began with a Delaware judge blocking the compensation in January 2024., according to expert analysis

According to reports, Judge Kathaleen McCormick pointed to some board members’ close relationship with Musk and determined that shareholders were given insufficient information to make an informed decision on the original pay proposal. Despite Tesla shareholders approving the package for a second time in June 2023 as the company appealed the ruling, McCormick reportedly shot down the $56 billion plan again in December.

The $1 Trillion Proposal and Investor Resistance

Musk’s latest compensation proposal could be worth approximately $1 trillion if Tesla reaches certain ambitious goals over the next decade, according to analysis of the plan. However, the electric vehicle maker faces significant investor pushback against the unprecedented package.

Multiple state government officials and Tesla investors are reportedly urging shareholders to vote against Musk’s compensation plan. The opposition comes amid concerns about governance and the scale of the potential payout, which would dwarf Musk’s current net worth estimated at $487.5 billion, making him the world’s wealthiest person ahead of Oracle founder Larry Ellison and Meta founder Mark Zuckerberg., according to additional coverage

Musk’s Leverage Tactics and Tesla Performance

Before his $1 trillion compensation proposal was formalized, Musk reportedly “raised the possibility that he may pursue his other interests and leave Tesla” if he was not assured a 25% voting interest, according to sources familiar with the negotiations. The threat adds another layer of complexity to the compensation debate as Tesla navigates both legal challenges and market pressures.

The controversy unfolds against a mixed financial backdrop for Tesla. The company’s third-quarter earnings reportedly partially fell short of expectations, with earnings per share of $0.50 coming in below projections of $0.56, despite revenues of $28.09 billion exceeding Wall Street expectations of $26.5 billion. Tesla shares closed down a fraction of a percent before dropping more than 3.5% in after-hours trading following the earnings report.

Ongoing Legal Proceedings

Legal representatives for Tesla are still urging the Delaware court to restore Musk’s original $56 billion package in an ongoing case that analysts suggest could be resolved in the coming months. The outcome of this case may set important precedents for corporate governance and executive compensation standards, particularly for technology companies with dominant founder-CEOs.

The continuing legal battles and Musk’s aggressive rhetoric highlight the high stakes involved in what has become one of the most closely watched corporate governance disputes in recent memory, with implications that could reshape how executive compensation is structured and approved at major publicly traded companies.

References & Further Reading

This article draws from multiple authoritative sources. For more information, please consult:

• http://en.wikipedia.org/wiki/Tesla,_Inc.
• http://en.wikipedia.org/wiki/Shareholder
• http://en.wikipedia.org/wiki/Meta_Platforms
• http://en.wikipedia.org/wiki/Larry_Ellison
• http://en.wikipedia.org/wiki/International_Space_Station

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