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(Bloomberg) — Elon Musk once again turned to Tesla Inc.’s board to arrange a huge stock compensation package, years after he sold a sizable chunk of the company’s stock to buy Twitter Inc. .
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In one of several posts on the subject, Musk wrote that unless he controls about 25% of the voting power at Tesla, he would rather develop artificial intelligence and robotics products elsewhere. He remains the automaker’s largest shareholder with a roughly 13% stake, but sold about $40 billion worth of stock in 2022 to finance the Twitter acquisition.
Mr. Musk, 52, praised other positions on Tesla’s board and said the board was awaiting the Delaware Chancery Court’s ruling before preparing another compensation plan. Judge Catherine St. J. McCormick, who was also presiding over Mr. Musk’s ill-fated attempt to break away from the Twitter deal, also ruled that Tesla’s board would be independent of Mr. Musk when raising $55. The court is scheduled to rule on a lawsuit brought by Tesla shareholders who claim they were unable to exercise their sexual rights. Received the Billion Performance Award in 2018.
“This is primarily about ensuring the right amount of voting influence in Tesla,” Musk wrote in one of his posts about X.
Musk is putting pressure on Tesla’s board at a troubling time. The company lost $94 billion in market value due to slowing growth and shrinking profit margins, the worst start for a publicly traded company. The CEO also had to respond to a Wall Street Journal report about his drug use and the concerns it raised among executives and directors at his companies, including Tesla.
Read more: Musk’s drug use is latest headache for Tesla board
Tesla shares were up 0.7% in New York trading as of 11 a.m. Tuesday. The company’s market capitalization is $695.8 billion, an increase of more than 11 times since the board announced Musk’s compensation in January 2018. Meanwhile, the company’s valuation had reached its peak of more than $1.2 trillion before the Twitter acquisition.
The combination of the awards Tesla offered Musk in 2009, 2012 and 2018, and the value destruction caused by Musk’s acquisition of Twitter, led to a dubious milestone a little more than a year ago. Musk became the first person in history to erase $200 billion from his net worth.
His fortunes rebounded last year as Tesla’s stock doubled and the valuation of Space Exploration Technologies Inc. soared. Musk has regained the top spot on Bloomberg’s list of billionaires and is now worth an estimated $206.1 billion, about 15% ahead of second place Jeff Bezos.
Read more: Musk leads the world’s wealthiest people and aims to increase wealth by $1.5 trillion in 2023
Musk’s sudden assertion that he is reluctant to make Tesla a leader in AI and robotics comes after Tesla has repeatedly boasted over the years that it is a leader in the field. The automaker offers products called Autopilot and Full Self-Driving, both of which are driver-assistance features. We are also developing a humanoid robot called Optimus.
The CEO also told analysts in July that Tesla would invest more than $1 billion next year in Project Dojo, a project aimed at making Tesla a player in supercomputing for purposes such as developing self-driving features. He said he expected it.
At Tesla’s first AI Day in August 2021, Musk said he wanted to demonstrate that the company is not just a car maker, but a leader in real-world AI.
Read more: Musk is willing to bet Tesla’s profits on the dream of driverless cars
Last July, Musk announced the creation of xAI, a startup that aims to rival Microsoft-backed OpenAI and Google’s DeepMind. A week later, an analyst asked him on Tesla’s earnings call whether the new AI company would overlap, compete with, or add value to the automaker’s AI efforts. He said it was the latter.
“What is Tesla? It’s an automotive, energy or AI company,” said Daniel Koller, head of the automotive and mobility practice at consultancy Intralink. “I don’t think there’s a problem with starting a new company, as long as it’s not an AI company.”
“That said, I don’t believe his actions or word choices are currently benefiting his company,” Koller added.
(Updates stock trading in 6th paragraph.)
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