02/06/2024 07:30
Updated on 06/02/2024 07:30
These are difficult times for Tesla. The largest manufacturer of electric cars, the great driver of change in mobility, has not had the first quarter that everyone expected. Although sales continue to achieve good records, the company’s profits and profitability have fallen after the drastic cut in car rates. In the midst of economic chaos, Elon Musk a good pinch of his fortune is at stake. The businessman and current CEO of the company has not received a dollar for his work for six years. The shareholders meeting now has to approve billions in compensationalthough everything indicates that many of the investors are going to oppose the proposal.
You have to go back to 2018 to know the beginnings of this legal dispute that now has many in suspense. Already a consolidated company in the markets and on the New York Stock Exchange, Elon Musk should have received a transfer of $55.8 billion from his company. While Musk’s official salary is zero, The director of the company receives bonuses for the good direction of the company. That is, their remuneration depends on the objectives achieved. Needless to say, Tesla has achieved everything it set out to do and for many, Musk deserves every single one of those dollars.
The change of headquarters does not guarantee that Musk will receive his millionaire compensation
However, not everyone thinks the same. Last January, a court in the State of Delaware, the State in which Tesla is consolidated as a company, ruled against the compensatory payment to Musk. Then, many of the shareholders in favor of Musk promoted actions to change the course of the decision. In recent weeks, investors have been voting in favor of implementing important changes to the company’s structure. Two decisions seem fundamental and connected. After hearing the ruling of the Delaware court, Musk proposed to the board to move the company’s headquarters from the aforementioned State to Texas, where the headquarters are currently located.
This movement is more important than many imagine since the denial of payment to Musk only applies in Delaware, so the CEO could receive, if nothing remedies it, his compensation after the change of headquarters. The second voting element is the aforementioned payment for the objectives achieved throughout these years. Although, at first, everything indicated that the measure was going to be approved without major opposition, New enemies now emerge in the economic dispute. Several investor funds have assured that they will vote against the payment and encourage other shareholders to follow in their footsteps since they consider the disbursement scandalous taking into account the current state of the company.
On the other hand, Musk remains silent on the matter and lets his followers do the dirty work. Despite this supposed silence, in recent days Elon Musk has issued important threats. As we all know, Tesla trusts much of its future to software development and Artificial Intelligence. However, Musk assures that he will not pursue such objectives unless he has control of 25% of the company. This is where another of the companies founded by the hyperactive businessman comes into play, xAI. The company, focused on Artificial Intelligence, has just raised $6 billion in a new round of financing with an estimated valuation of $24 billion. The game is more than evident.
The board meets next June 13 and that will be when Elon Musk will know whether or not he will receive his $55.8 billion bonus. If he does not receive it, he could carry out his threat of not supporting the development of Artificial Intelligence through Tesla and do it through the company that he does control. This could be a severe blow to the company’s commercial interests at a time of extreme delicacy. To settle accounts, Tesla has laid off more than 10% of its workers worldwide. Thousands of jobs that have not been filled and that have put entire and highly profitable divisions such as the Supercharger department in check. In a few days we will know the final decision and the measures that Elon Musk will take accordingly.
