electrek:

Elon Musk has made a bizarre statement in which he appears to complain about his smaller stake in Tesla and said that he prefers building products elsewhere unless he gets a bigger stake in the company.

The statement is particularly bizarre when you consider the fact that he himself recently sold tens of billions of dollars worth of Tesla stock to buy a grossly overpriced Twitter.

There’s currently some talk, mainly from Musk fans, about Tesla putting together a new CEO compensation package for him.

Musk completed his last CEO compensation plan, which awarded him millions of Tesla shares worth billions of dollars and made him the richest man in the world.

Ironically, the talks about a new CEO compensation package came just as Tesla slashed its own employee stock option plan.

While most commentators don’t seem opposed to Musk having a new reasonable compensation package, the consensus is that since Musk owns 411 million shares in Tesla, representing about 13% of the outstanding shares, that’s plenty of incentives for him to perform as CEO.

However, Musk responded to this argument with the following:

Musk claims that he wants more shares in Tesla to have more “influence” on the company’s AI and robotics endeavors:

I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned. Unless that is the case, I would prefer to build products outside of Tesla.

The CEO of Tesla is claiming here that he prefers to build products outside of the company because he doesn’t have a big enough stake in it.

It’s important to note that Musk used to have a much bigger stake in Tesla before his botched acquisition of Twitter.

For those who don’t remember the whole debacle, 2021-2022 were an interesting few years for Musk’s Tesla ownership.

It all started when Musk said he would sell 10% of his stake in Tesla if a Twitter poll would agree, which it unsurprisingly did.

The CEO framed the idea as pressure from the media and politicians about the rich not paying taxes on unrealized gains. He said that he would voluntarily set himself up to have the biggest tax bill in US history.

However, Musk wasn’t as vocal about the fact that he was facing a giant tax bill regardless of his sale of shares, due to a large number of stock options he needed to exercise from his previously mentioned massive CEO compensation plan.

The CEO then used the proceeds from selling his Tesla shares to invest a few billions into Twitter.

He later agreed to buy Twitter and take it private for $44 billion. Musk quickly backed out of the deal despite it being signed. Twitter sued him to force him to go through with the deal, which he ultimately did.

But to pay for the acquisition, he had to sell tens of billions of dollars worth of Tesla stock, which resulted in a significant crash in the stock price.

He even told Tesla shareholders that he would stop selling shares, but then sold more anyway.

Update: Musk added that the only reason he doesn’t have a new compensation plan is due to Tesla waiting for the decision in a court case brought on by shareholders over his prior compensation plan being too excessive, according to the complaint.

Following a separate lawsuit, Musk and Tesla’s board agreed to return over $700 million to the company over excessive board compensation.

Electrek’s Take

This is Elon setting the stage for another wild compensation package. I bet that the board is already discussing it.

But honestly, I don’t get how he can even be CEO of Tesla at this point.

There’s a clear conflict of interest. He has repeatedly claimed recently that Tesla is an AI/robotics company and he started a separate new AI startup.

Now, he is straight up saying that he prefers building new AI products at that startup rather than Tesla because he has more control (larger ownership stake) over that startup.

Is this a clear conflict of interest, or am I missing something?

And regardless of that, are we to believe that Elon wants a bigger stake in Tesla to have more influence over AI or because he wasted his Tesla shares on an overpriced Twitter?

Only he knows the truth and we all know that the truth is only on X:

I have my doubts. But I have more than doubts and complaints this time. I have a solution.

Tesla shareholders should give Elon a new CEO compensation plan. 1 million TSLA shares per year, but there’s a catch. Every time he tweets something dumb, you take away 10,000 shares. There you go. The most efficient CEO compensation to create shareholder value. You are welcome.


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MuskWire TLDR:

Elon Musk recently made a statement expressing his dissatisfaction with his smaller stake in Tesla and his preference for building products elsewhere unless he receives a bigger stake in the company. This statement is peculiar considering the fact that Musk himself sold billions of dollars worth of Tesla stock to purchase an overpriced Twitter. Some Tesla fans are now discussing the possibility of a new CEO compensation package for Musk, despite the company recently reducing its employee stock option plan. While many commentators believe that Musk already has sufficient incentives as CEO due to his ownership of 411 million shares, representing about 13% of outstanding shares, Musk argues that he wants more shares to have greater influence over the company’s AI and robotics ventures. It is worth noting that Musk previously had a larger stake in Tesla before his failed acquisition of Twitter. In 2021-2022, Musk announced that he would sell 10% of his Tesla stake based on a Twitter poll, citing pressure from the media and politicians regarding the wealthy’s tax obligations. However, Musk did not mention that he was already facing a significant tax bill due to stock options from his previous CEO compensation plan. He used the proceeds from selling Tesla shares to invest billions into Twitter and even agreed to buy the platform for $44 billion before reneging on the deal. This resulted in a substantial drop in Tesla’s stock price as Musk had to sell additional shares to fund the acquisition. Musk claims that the reason he does not have a new compensation plan is because Tesla is awaiting a court decision regarding a shareholder lawsuit over his previous excessive compensation plan. Despite the controversy, some believe that Musk’s desire for a larger stake in Tesla is driven by his interest in AI and robotics, while others suspect it is due to his mismanagement of Tesla shares during the Twitter acquisition. Ultimately, the truth behind Musk’s motivations remains uncertain. Some propose a new compensation plan for Musk, with the condition that he loses shares for making foolish statements on Twitter, as a way to create shareholder value.