Korean media: Tesla shareholders approve "Musk's $1 trillion compensation plan" ... "Hold onto your shares"

It is reported that a plan to reward CEO Elon Musk with 100 billion shares (approximately 1,400 trillion won) if Tesla achieves business goals such as a market value of 8.5 trillion dollars was approved at the Tesla shareholders' meeting.

According to a live stream video of the shareholders' meeting on October 6, the annual shareholders' meeting held at Tesla's headquarters in Austin, Texas, USA, passed the stock reward plan for Musk. According to the company, more than 75% of the shareholders voted in favor of the CEO's reward plan.

After the final results were announced, Musk said, "Outstanding shareholders," and "Please firmly hold onto Tesla shares."

It is reported that Musk himself, who holds 13-15% of Tesla's shares, also participated in the voting that day. Previously, because the legal registration location of Tesla was Delaware, where Musk himself was not allowed to participate in votes related to CEO compensation, but after the 2024 shareholders' meeting, Tesla's legal registration location was changed to Texas, and under the new regulations, the CEO can vote according to his shareholding ratio.

The reward plan designed by the Tesla board stipulates that if Musk achieves the set business targets, he will be paid approximately 423 million shares over 12 stages before 2035, which accounts for about 12% of Tesla's common stock.

Despite the opposition from several large funds, including the Norwegian Sovereign Fund, the plan was ultimately passed. The opposing side's position is that Musk has excessive control over the board, and the reward amount is too high. On the 4th, one of the top ten shareholders of Tesla, the Norwegian Sovereign Fund, stated: "Although we recognize Musk's unique talent and the value he has created," "we are concerned about paying such an unprecedentedly high reward." On October 17, the world's largest voting rights advisory company, ISS, also opposed the Musk reward plan.

In late October, the Tesla board had warned in an open letter to shareholders that if the reward plan was rejected by the shareholders' meeting, Musk might leave the company. After the release of Tesla's third-quarter results on October 22, Musk also indirectly expressed dissatisfaction with the rejection of the reward plan and the weakening of his control during a conference call. At that time, he mentioned the humanoid robot "Optimus" being developed by Tesla, saying, "If we form an army of robots, can I have strong influence over the robot army?" "If I cannot have strong influence, at least I would feel uncomfortable about forming an army of robots."

The process of obtaining the reward was very difficult. To get the reward, Musk first needs to increase Tesla's current market value of about 1.5 trillion dollars to 2 trillion dollars, achieve stage goals, and finally reach a market value of 8.5 trillion dollars. In addition, Tesla needs to deliver 20 million vehicles, which is more than twice the total number delivered since the company was founded. Moreover, it must achieve targets such as 10 million FSD (autonomous driving) software subscriptions, deployment of 1 million humanoid robots, commercial operation of 1 million robot (driverless) taxis, and EBITDA (earnings before interest, taxes, depreciation, and amortization) of 400 billion dollars.

According to estimates, if Musk receives the full reward, it will be approximately 1 trillion dollars. This is an unprecedented, astronomical CEO reward plan in the history of global enterprises. AP stated: "Even if only part of the goals are achieved in the next few years, wealth will increase by tens of billions of dollars." "At that time, Musk may surpass John D. Rockefeller, who is evaluated as the richest person in American history." According to Guinness World Records, Rockefeller's assets at its peak over 110 years ago were worth approximately 630 billion dollars (about 912 trillion 8.7 billion won). Forbes estimated Musk's current assets to be about 493 billion dollars (about 714 trillion 3.5 billion won).

On the same day, during the regular trading hours on the New York Stock Exchange, Tesla's stock price fell 3.50% compared to the previous trading day, closing at 445.91 dollars. However, in after-hours trading after the approval of the CEO reward plan at the shareholders' meeting, the stock price rose more than 2%.

Source: Chosun Ilbo

Original: www.toutiao.com/article/1848126970091532/

Statement: The article represents the views of the author.