Elon Musk, the world’s richest person, spent the end of Tesla ’s earnings call after his company’s earnings report pleading with investors to approve his $1 trillion (€862 billion) pay package and blasting the shareholder advisory firms that have come out against the proposal.
“There needs to be enough voting control to give a strong influence, but not so much that I can’t be fired if I go insane,” Musk said, interrupting his chief financial officer as the more than hour-long call wrapped up.
It was classic Musk: a fiery end to what had otherwise been a ho-hum earnings call largely devoted to Tesla’s artificial intelligence, humanoid robot and self-driving initiatives. Shareholders will vote on the pay package at Tesla’s November 6th annual meeting in Austin.
Tesla shares dropped 3.9 per cent at the start of premarket trading Thursday in New York. The stock is up almost 9 per cent for the year, trailing the 14 per cent advance by the S&P 500 Index.
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Proxy advisers Institutional Shareholder Services and Glass Lewis have recommended that investors reject the unprecedented payout to Musk, the value of which is dependent on Tesla reaching a litany of market value thresholds and operational milestones. ISS cited “unmitigated concerns” with the magnitude and design of the award, while Glass Lewis took issue with its potential to dilute other shareholders’ ownership.
Musk emphasised, as he has in the past, that sufficient voting control matters more to him than monetary compensation from Tesla.
“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 said.
After Musk was finished, Tesla CFO Vaibhav Taneja resumed his closing remarks, praising the “amazing job” the special board committee did in constructing the award.
“There’s nothing which gets passed on until the time shareholders make substantial returns,” Taneja said, urging shareholders two more times to vote in favour of the plan.
Musk, 54, ranks No. 1 on the Bloomberg Billionaires Index with a net worth of about $455 billion.
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His comments came after Tesla’s profit plunged despite a record quarter of vehicle sales, reflecting ongoing strains on the automotive business.
Musk spent much of Tesla’s third-quarter earnings call discussing ambitious but opaque initiatives, including humanoid robot and artificial intelligence programs, as well as his pay. Yethe offered few details about how Tesla will revive its core business selling electric vehicles after a 40 per cent drop in operating profit.
“We’re left with this lingering uncertainty regarding what the near-term growth drivers will be,” said Garrett Nelson, senior equity analyst at CFRA Research.
Adjusted earnings dropped to 50 cents a share in the third quarter, down 31 per cent from a year ago, the company said Wednesday.
The results extended a string of weaker-than-expected profit to four straight quarters, showing the company isn’t immune to the rising costs buffeting the auto industry as US President Donald Trump dramatically reshapes US policy. Tesla’s operating expenses soared 50 per cent to $3.4 billion in the quarter, with tariff costs exceeding $400 million. – Bloomberg
