• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 7 hours Tesla Begins Construction Of World’s Largest Energy Storage Facility
  • 4 hours Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 3 hours Will any journalist have the balls to ask Kamala if she supports Wall Street "Carried Interest" Tax Loophole
  • 1 day Trump Hands Putin Major Geopolitical Victory
  • 6 hours America Could Go Fully Electric Right Now
  • 1 min Buying votes is cool now.
  • 1 day Those Nasty White People and Camping Racism
  • 5 hours In 1,267 days, Trump has made 20,055 false or misleading claims
  • 17 hours .
  • 13 hours The Truth about Chinese and Indian Engineering
  • 15 hours Brent above $45. Holding breath for $50??
  • 22 hours COVID&life and Vicious Circle: "Working From Home Is Not Panacea For Virus"
  • 16 hours The World is Facing a Solar Panel Waste Problem
  • 2 days Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 2 days China wields coronavirus to nationalize American-owned carmaker
COVID-19 Is Causing The GCC To Crumble

COVID-19 Is Causing The GCC To Crumble

The 39-year-old Gulf Cooperation Council…

Advisory Firm: Tesla Shareholders Should Oust Musk

Tesla shareholders should vote to oust Tesla chief executive Elon Musk from his position and the board of the company for his controversial tweets and a bonus package that could see him get richer by $55.8 billion, Pirc, a shareholder advisory firm from the UK said, as quoted by The Guardian.

“The board, including CEO Elon Musk, awarded themselves excessive compensation packages over a three-year period that allegedly allowed directors to ‘enrich themselves at the company’s expense’,” the advisory firm said.

Tesla’s chief executive has a unique compensation plan. Rather than a salary, Musk has the right to acquire Tesla shares at prices much below market prices contingent on certain milestones. This compensation plan came to the fore recently, when the company’s stock soared following the surprising report of yet another quarterly profit. As a result of this, Musk could buy the first tranche of his Tesla shares and then sell them, making a profit of more than $750 million assuming prices at the end of April.

Theoretically, this compensation scheme could make him a lot richer, and now it appears some shareholders, or at least their advisors, are not on board with that. According to Pirc, Musk is also a reputational risk for the company because of his Twitter habit, which has led to real-life confrontations with regulators and courts on more than one occasion.

The peak of Musk’s Twitter troubles came last year. First, in April, SEC took Musk to court after he tweeted that Tesla will manufacture half a million cars this year. However, the tweet was quickly followed by another one, clarifying that he “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”

A year earlier, Musk took the market by storm again when he declared on Twitter that he planned to take Tesla private and that funding had been secured. The tweet followed an FT report that Saudi Arabia had acquired a stake of between 3 and almost 5 percent, worth US$2 billion, in Tesla. This started a flood of speculation and attracted the attention of regulators.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • James Hilden-Minton on July 01 2020 said:
    This is pretty silly out-of-date FUD. There is no way the majority of Tesla shareholders (with Musk recusing himself) would agree to give Musk the boot.

    This compensation plan literally only pays Musk if he is able to growth the stock price at a phenomenal rate. The full plan, set when market cap was just under $50B, pays out only if he can grow market cap (adjusted for dilution) to $650B by end of 2027. Yeah, so if Musk is able to pull off a 13-bagger in 8 years, he get richly rewarded. What do the shareholders get? They get a 13-bagger return.

    So far under this plan, Musk's entrepreneurial leadership has taken Tesla from $50B to over $200B. In fact, yesterday Tesla overtook Exxon Mobil by market cap. No serious investor in Tesla would want to boot Musk now and compromise this growth trajectory.

    I would seriously recommend that a journalist interview a cross-section of Tesla shareholders before publishing ignorant non-sense like this.
  • Maxander on July 01 2020 said:
    I think Tesla due to its several years of loss making history should be forced to file Chapter 11 bankruptcy.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News