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In a recent company-wide Tesla call, Elon Musk insisted he needed a $1 trillion compensation package in order to ensure control of Tesla’s “robot army.”
What’s happening?
Reports from Mashable highlight a proposed package in which Musk could gain nearly $1 trillion in Tesla stock over a decade, given he hits multiple huge company milestones. This figure is a notable jump from the proposal from Tesla’s board in August.
The plan is facing backlash, including a “Take Back Tesla” campaign by unions, firms, and investors. The campaign and its organizers are expressing concern for public pension funds and other key stakeholders in Tesla, saying they should have some say in holding Musk accountable.
Why is this $1 trillion package important?
Aside from concerns about other stakeholders and the accountability of Musk and other Tesla board members or executives, Musk’s reasoning for needing such an expensive package has raised some concern.
“It’s just, if we build this robot army do I have at least a strong influence over that robot army? Not current control but a strong influence. That’s what it comes down to in a nutshell. I don’t feel comfortable wielding that robot army if I don’t have at least a strong influence,” said Musk.
The “robot army” in question is a robot called Optimus that Tesla is working on, which has thus far been presented as a household helper.
It’s unclear how increasing his compensation would give Musk more control over the robots his company is building, rather than simply asking for more contractual direct oversight of that part of the business to address whatever lack of control or influence he feels he is facing. Musk seemed to imply that having a high stock-based compensation package would give him some insurance over being “ousted,” to use his word, at a later date.
The earnings call where Musk presented this compensation plan was missing a few key components, like a mention of the impact of tariffs on parts, how the next quarter is shaping up, or a single mention of the Cybertruck. Stock immediately sank after the call.
This sinking stock and Musk’s demands can have effects beyond Tesla stakeholders, like rising prices on electric vehicles or Tesla services, which can reduce positive impacts on clear air and potential savings for electric vehicle owners.
This is not the first time that Musk has stirred controversy and affected Tesla’s stock, and that pattern seemed to increase after he began getting involved in influencing politics in America and several other countries — something he has begun to decrease in recent months.
Pushback from board members and major stakeholders has many feeling doubtful that this compensation package, or the robot army Musk aims to control, will see the light of day.
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