Musk’s outrageous salary forces: Tesla shareholders voted in favour of Elon Musk‘s compensation package, which originally amounted to $56 billion. A monstrous figure that caused tension and complications inside and outside the company. The plan had been approved in 2018 after Tesla’s founder and number one reached a series of milestones, including an increase in market value, sales and company profits. But then, under pressure from inside and outside the company, a Delaware judge had stepped in to suspend the decision.
The vote had been preceded by much controversy in recent days, with several major investors opposing such a large payout to Musk, who has been accused for years of not devoting enough time to Tesla’s fortunes as he fought on too many fronts between SpaceX, X, Starlink, Neuralink and x.Ai, the latest artificial intelligence project.
Musk was, is and will still be the big boss of Tesla
Musk’s compensation plan, reduced from 2018 to $44.9 billion due to the fall in Tesla’s share price, was voted for by 72% of investors (excluding shares held by Musk and his brother Kimbal). It’s a high percentage, which gives Musk credit for the work he’s done and confidence to continue. Thank you, I love you”, said the big boss immediately after the vote, adding that “even if I wanted to, I can’t cut and run”.
The remark has a double meaning. On the one hand, the rules require Musk to hold the shares for at least five years before selling them, so their value is subject to market fluctuations. On the other hand, since the shares are equity and not cash, Elon Musk must continue his efforts to grow Tesla, which has been going through a difficult time for months. The value of its shares has fallen by 20% over the past year due to falling sales due to reduced demand for electric vehicles. This does not diminish the role of Tesla, which remains the world’s number one car company, with a value approaching $600 billion. However, the competition is making huge strides, with Chinese electric car brands poised to invade international markets.
Returning to Musk’s mega payday, the Associated Press claims that despite the favourable vote, the package could remain tied up in the Delaware Chancery Court and the Supreme Court for a long time as Tesla tries to overturn the Delaware judge’s ruling. A scenario that has angered Musk, who is ready to move Tesla’s legal headquarters from Delaware to Texas. The judge’s decision to halt the compensation package was based on his belief that Musk had engaged in coercive behaviour towards certain shareholders and personal relationships with several Tesla board members.
Beyond US norms, however, the Bale figure forces one to reflect on the lack of limits in a market gone mad. The call for institutions to set controls or thresholds that cannot be crossed is perceived as illegitimate interference in the land of the free market. But when you consider that Musk’s salary, the richest pay package ever approved in the US, is equivalent to 75% of the UK government’s total spending on schools, or more than double the budget of Italy, it is useful to feel that something is wrong.
Nobody has the solution, but it needs to be found
No one will ever set a limit, except in industries that are publicly run or associated with the public sector. Tesla is a private company for profit, so it is free to decide, at the behest of its investors, what salary its number one is entitled to. I would like to point out that this is not a matter of envy in the sense that, whatever happens in the future, Musk has already made history for his vision and his ability to realise unthinkable projects.
However, in the face of certain figures, if he (and those like him, because there are so many other cases like his today) do not make a gesture to put the brakes on a race for wealth whose end is not in sight, even if he continues to live in gold, Tesla’s master father may find himself more criticised and less respected by many ordinary mortals. Who will recognise his enormous creative genius and lack of empathy for an increasingly troubled world?
