The world’s third-richest man got a vote of confidence as his control over the company was called into question.
Elon Musk made about $5 billion today as Tesla shares rose today. Good for him. The reason: On Thursday, Tesla shareholders reiterated their support for a $46 billion pay package that was struck down by a Delaware court earlier this year. But the vote doesn’t just hand him money and Tesla shares — not yet, at least. In fact, he may never get them, if appellate judges in Delaware decide that this is a meaningless gesture. The real value of the vote is that it solidifies his control over Tesla now, during a chaotic period when the company has lost about 60 percent of its value and Musk tries to transform it from an electric-vehicle maker into some kind of AI-powered robotaxi service. In other words, it gives Musk another reason to tell his doubters to fuck off.
Early results of the shareholder vote, at least when it came to Musk’s pay package, were made known on Wednesday night, about a full day before the actual close of voting. On X, he broadcast that Tesla shareholders, who tend to be extremely pro-Musk, had approved his 304 million shares in compensation — worth about $46 billion today — by a “wide margin.” By the time all the votes were tallied on Thursday, Musk had officially had his pay package approved — though by how much wasn’t initially revealed. (In 2017, it passed with 73 percent of shareholder votes). This is a real vote of confidence in the CEO, so much so that shareholders overcame concerns about a possible $25 billion tax bill and steeply declining sales to signal that they are still on Team Elon. (The other vote referenced is about incorporating the company in Texas, a move that was instigated by his unhappiness with the decision in Delaware, where Tesla is incorporated.)
Both Tesla shareholder resolutions are currently passing by wide margins!
— Elon Musk (@elonmusk) June 13, 2024
♥️♥️ Thanks for your support!! ♥️♥️ pic.twitter.com/udf56VGQdo
The thing about this Musk is that, unless we collectively decide to abolish money and return to the barter system, he will always be insanely rich. He has even said before that this pay package really isn’t about money but about ownership of Tesla. Musk has 13 percent of the company, and he wants at least 25 percent. This package gets him more than halfway there. Musk believes he needs these additional shares in order to keep Tesla’s AI systems safe. The subtext here is that, without him acting as an AI bulwark, some outside investor could turn his systems against humanity or something. That’s certainly an argument. But it’s doubtful that any shareholders had that in mind as they cast their votes this week.
If anyone knows anything about the power of signaling, it’s Musk. (After all, he was one of Twitter’s most important users for years before he bought the social-media company and rebranded it.) Musk also knows something about quixotic legal battles that go nowhere. (In fact, he dropped his most recent lawsuit against OpenAI over breach of contract, even though he apparently never had a contract during his brief stint with the company.) A more cautious CEO might have waited to show these results, since shareholders could theoretically reverse them. But if you take the vote as a more general vote of confidence in Musk’s vision of the future, then of course he would want to get it out as early as possible. In a way, it even goes beyond that by encouraging Musk to sidestep one of the most powerful and respected business judges in the country. “In many ways, this feels like a sort of stare-down contest with the Delaware courts,” Ann M. Lipton, a business-law professor at Tulane University School of Law, told me. So he may still lose an old pay package — but what he gains is the right to do whatever he pleases with Tesla for the foreseeable future.
