Tesla CEO Elon Musk on Wednesday called two shareholder advisory firms that oppose his proposed $1 trillion pay package “corporate terrorists” during an earnings call, criticizing the companies after one of them warned of “absolute concerns” surrounding the controversial pay proposal.
Key data
Musk made the comment near the end of Tesla’s third-quarter earnings call, saying recommendations from consulting firms Glass Lewis and Institutional Shareholder Services to vote against his pay package were “stupid.”
“Those guys are corporate terrorists,” Musk said of the firms, adding that “many” of the “passive” index firms that have a stake in Tesla align their votes with the recommendations of Glass Lewis and ISS.
Musk claimed that the firms have “made a lot of terrible recommendations in the past” that, if followed, would have been “extremely destructive” to Tesla’s future.
Glass Lewis and ISS previously recommended shareholders vote against Musk’s $56 billion pay package last year, which was approved by Tesla shareholders but is still being disputed in court.
Forbes Rating
We estimate Musk’s net worth at $487.5 billion, making him the richest person in the world, ahead of Oracle founder Larry Ellison ($331 billion) and Meta founder Mark Zuckerberg ($251.2 billion).
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Tangent
Tesla’s third-quarter earnings came in partially below expectations. The electric vehicle maker earned $28.09 billion in revenue during the quarter, well above Wall Street expectations of $26.5 billion.
However, earnings per share of $0.50 came in below projections of $0.56. Tesla shares closed down a fraction of a percentage point on Wednesday, before falling more than 3.5% in after-hours trading.
Key background
Musk constantly ran into obstacles trying to get his exorbitant pay packages approved. The $56 billion proposal was introduced several years ago before being blocked by a Delaware judge in January 2024.
The judge, Kathaleen McCormick, noted some board members’ close relationship with Musk and said shareholders did not receive enough information to make an informed decision about the pay proposal. Tesla shareholders approved the package a second time in June last year, when the company appealed the judge’s ruling.
McCormick again rejected the $56 billion plan in December. Tesla’s lawyers continue to urge it to reinstate the package in an ongoing case that could be resolved in the coming months. Tesla investors and several state government officials are urging shareholders to vote against Musk’s latest pay plan, which could reach $1 trillion if the company hits certain goals over the next decade.
Surprising fact
Musk threatened to leave Tesla before his $1 trillion compensation proposal was formalized. The billionaire raised the possibility of pursuing his other interests and abandoning Tesla if he was not assured a 25% voting stake.
This article was originally published in Forbes US
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