A Tesla earnings call took an unexpected turn when CEO Elon Musk intervened to plead with investors to approve his proposed $1 trillion pay package. The former Donald Trump aide's impassioned plea came in an otherwise one-dimensional call, primarily focused on Tesla's artificial intelligence, humanoid robot, and self-driving initiatives.
Musk, who is already the world's richest man, justified the proposal, claiming the biggest pay package in history was necessary to protect his company. During the call with investors, he stressed the importance of having sufficient voting control to maintain influence over the company.
"It's not like I'm going to go spend the money. There needs to be enough voting control to give (me) a strong influence - but not so much that I can't be fired if I go insane," he said, interrupting Tesla's Chief Financial Officer, Vaibhav Taneja, as the more than hour-long call wrapped up.
The call came close on the heels of Tesla's disappointing earnings report, which showed a 40 per cent drop in operating income in the third quarter. Despite record vehicle deliveries, the company's profit missed estimates due to rising costs and changing US policies. Tesla's operating expenses soared 50 per cent to $3.4 billion, and tariffs took a toll of over $400 million on last quarter's results.
According to a report in Bloomberg, Institutional Shareholder Services and Glass Lewis have advised investors to reject Musk's unprecedented payout, the value of which is reliant on Tesla meeting market value benchmarks and operational milestones. ISS expressed "unmitigated concerns" about the size and nature of the award, while Glass Lewis questioned its potential to dilute other shareholders' ownership.
Musk was forthright in expressing his discontent with the advisory firms, calling their recommendations "asinine", adding they had "no freaking clue."
"I just don't feel comfortable building a robot army here, and then being ousted because of some asinine recommendations from ISS and Glass Lewis, who have no freaking clue," he added.
"They have made many terrible recommendations in the past that if those recommendations had been followed, it would have been extremely destructive to the future of the company," he was quoted as saying by CNN.
Taneja later praised the special board committee for their work in structuring the award, emphasising that nothing would be passed until shareholders see substantial returns. He urged shareholders to support the idea, saying, "There's nothing that gets passed on until the time shareholders make substantial returns."
Shareholders will vote on Musk's $1 trillion pay package at the EV maker's annual meeting on November 6.
With a net worth of approximately $455 billion, Musk ranks No. 1 on the Bloomberg Billionaires Index.
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