Lovable Elon pulls a fast one
You have to love the temerity of Elon Musk. He took to one of his companies, X, formerly known as Twitter, to lay out his requirements to the board of another, Tesla, for the new pay package he would like to receive. His last package, in 2018, was worth $55 billion and is still subject to lawsuits by ungrateful shareholders who participated in a windfall none could have anticipated, the company’s market cap rising tenfold in six years.
But things are different now, thanks to the still-unfulfilled promise of Tesla’s now-towering market value. Mr. Musk says he needs his personal stake raised from 13% to 25% to make sure the artificial-intelligence wonders he’s about to conjure don’t fall into the wrong hands, presumably through hostile takeover or board coup.
He seems to suggest an outright award of shares or at least voting rights, not stock options, which would require him to create commensurate additional value for all shareholders before he received a dime. In essence he wants to get paid a second time for AI promises that he’s been selling to Tesla investors for years and that are already embodied in its share price. Understand: As the biggest individual shareholder, Mr.
Musk has already been compensated in advance for these commitments, including a fully self-driving car, including gushing high-margin software profits, etc., which he has yet to fulfill. In fact, he just got done telling shareholders they should forgo current profits on car sales for more-lucrative software sales down the road. His biggest Wall Street cheerleader, Morgan Stanley’s Adam Jonas, in a formal report, cites these future AI profits as justification for the price investors are already paying for the shares.
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