Musk's pay package requires him to hold Tesla shares for at least five years before selling them
Some institutional investors expressed reservations about Musk's leadership and advised other investors to vote against his pay package and his brother Kimbal Musk's reelection to the board
Tesla shareholders approved a $56 billion pay package for CEO Elon Musk at the annual shareholder meeting on June 14, 2024
Tesla significantly outperformed the market since 2018 with a total shareholder return in the 98th percentile of all Russell 3000 companies during that period
The approval came after a Delaware Chancery Court Judge voided the initial approval in early 2024
Vanguard, Tesla's second-largest shareholder with approximately 7% ownership and $9 trillion in total assets, played a pivotal role in the deal's passage
Elon Musk, the CEO of Tesla, received a significant approval for his pay package worth $56 billion from Tesla shareholders at the Annual Shareholder Meeting on June 14, 2024. The vote came after a Delaware Chancery Court Judge voided the initial approval in early 2024. Vanguard, Tesla's second-largest shareholder with approximately 7 percent ownership and $9 trillion in total assets, played a pivotal role in the deal's passage.
Despite concerns from some investors and analysts, Musk's pay package was ratified by about 72 percent of voting shares. The package requires him to hold Tesla shares for at least five years before selling them. Vanguard's analysis showed that Tesla had significantly outperformed the market since 2018, with a total shareholder return in the 98th percentile of all Russell 3000 companies during that period.
However, some institutional investors expressed reservations about Musk's leadership and advised other investors to vote against his pay package and his brother Kimbal Musk's reelection to the board. AkademikerPension, a Danish pension fund, was among those who voiced concerns. The fund's chief information officer, Anders Schelde, stated that Tesla is a great company with not-so-great governance.
The implications of Musk's ratification are significant as it ensures his continued leadership at Tesla and maintains the alignment of his economic interests with the company's shareholder base. The pay package also serves as a vote of confidence in Musk's ability to lead Tesla, which has been a disruptor in the automotive industry since its inception less than two decades ago.
Vanguard ratified Elon Musk’s $56 billion pay package at the Annual Shareholder Meeting.
Vanguard owned approximately 7 percent of Tesla with roughly $9 trillion in total assets.
Total shareholder return was in the 98th percentile of all Russell 3000 companies from 2018 to 2023.
Accuracy
Some institutional Tesla shareholders expressed concerns about Elon Musk’s ability to lead the company after approving his record-shattering pay package.
Tesla stock has been down nearly 30% year to date and dropped about 2.5% on Friday following the vote.
Some institutional Tesla shareholders expressed concerns about Elon Musk’s ability to lead the company after approving his record-shattering pay package.
AkademikerPension, a Danish pension fund that invests in Tesla, advised other investors to vote against Musk’s pay package and his brother Kimbal Musk’s reelection to the board.
Accuracy
Vanguard, the largest institutional shareholder with a 7% stake in Tesla, voted to approve Musk’s pay package.
Deception
(30%)
The author uses emotional manipulation by quoting institutional shareholders who express concerns about Elon Musk's leadership and the pay package. The author also selectively reports information by only mentioning those shareholders who spoke against the pay package and ignoring those who voted in favor. There is no clear evidence of deception regarding facts, but the article does attempt to manipulate readers' emotions towards a negative view of Musk.
We remain invested, but governance is red flag, and I seriously wonder if Tesla would be a better company with or without Mr. Musk, and I think many investors have the same doubts.
Some institutional Tesla shareholders told Business Insider that approving Elon Musk’s record-shattering pay package was a mistake and that they have lingering concerns about Musk’s ability to lead the company.
Fallacies
(85%)
The author makes an appeal to authority by quoting institutional shareholders who expressed concerns about Elon Musk's ability to lead Tesla and the commensurateness of his pay package with his performance. However, the author does not provide any evidence that these concerns are representative of all institutional shareholders or that they have a better understanding of Musk's performance than those who voted in favor of the pay package.
]Once again it has been solidified that Tesla is a great company with not so great governance,
Bias
(90%)
The author, Lloyd Lee, expresses a negative opinion towards Elon Musk's pay package and the institutional shareholders who approved it. He quotes Anders Schelde of AkademikerPension as saying that Tesla is a 'great company with not so great governance.' The author also mentions New York City Comptroller Brad Lander's criticism of the pay package and his expectation for 'genuine board oversight.' These statements can be seen as expressing a bias against Musk and those who approved his pay package.
Some institutional Tesla shareholders told Business Insider that approving Elon Musk’s record-shattering pay package was a mistake
The Board should ensure its approval is required for any attempts to leverage Tesla’s resources for Musk’s other ventures
We remain invested, but governance is red flag, and I seriously wonder if Tesla would be a better company with or without Mr. Musk
Tesla shareholders voted to reinstate Elon Musk’s pay package on Thursday, despite concerns from some investors and analysts.
Vanguard was pivotal in the deal’s passage.
Accuracy
Vanguard, Tesla’s largest outside institutional shareholder, was pivotal in the deal’s passage.
Some analysts recommend holding or selling Tesla shares at this time, while others advise waiting for clearer growth opportunities.
Deception
(30%)
The article contains selective reporting as it only reports details that support the author's position. For instance, the author quotes early Tesla investor Ibrahim AlHusseini expressing skepticism about Elon Musk's pay package and predicting a drop in Tesla's stock due to missed deliveries and margins. However, the article does not report any opposing views or counterarguments from other investors or analysts. Additionally, the author uses emotional manipulation by quoting AlHusseini saying 'The whole thing is a game of chicken and the shareholders blinked.' This statement implies that the shareholders were weak and gave in to Musk's demands, which is an attempt to elicit an emotional response from readers. Lastly, the article contains sensationalism by using phrases like 'historic pay' and 'outrageous value' when describing Musk's pay package.
The whole thing is a game of chicken and the shareholders blinked.
This is part of the distraction problem.
But if it becomes one more battle, distraction, Twitter feud, and more ego – that won’t be a good thing.
Fallacies
(85%)
The author uses an appeal to authority fallacy when quoting Ibrahim AlHusseini's opinion on Tesla's stock and Elon Musk's pay package. The author also uses inflammatory rhetoric by stating 'the deal was set in 2018 when the milestones seemed virtually impossible and he met them.' This statement is an overgeneralization and lacks evidence.
'The whole thing is a game of chicken and the shareholders blinked,' early Tesla investor Ibrahim AlHusseini said. 'Fear of loss is a big motivator and Elon wielded that psychological mechanism to his benefit.', 'The deal was set in 2018 when the milestones seemed virtually impossible and he met them.'
