Elon Musk Calls Proxy Advisory Firms ‘Corporate Terrorists,’ Defends $1 Trillion Pay Package

Tesla CEO Elon Musk lashed out at two investor advisory groups after they opposed his proposed pay package of $1 trillion (about Rs 87,82,000 crore). During the company’s earnings call, Musk labelled the firms “corporate terrorists”. Earlier, one of the firms had expressed “unmitigated concerns” about the pay package.

According to Bloomberg, Musk addressed his proposed $1 trillion compensation plan towards the conclusion of Tesla’s earnings call. He defended it while sharply criticising the proxy advisory firms that have come out against it. He explained that holding roughly “mid-20s” percent of the company’s voting rights was necessary for him to retain “a strong influence” over Tesla’s direction.

“I just think that 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.

Musk dismissed the advice from Glass Lewis and Institutional Shareholder Services (ISS) to reject his massive pay deal as “asinine” and accused the two firms of having a poor track record, Bloomberg reported.

He claimed their previous guidance had often been misguided and, if acted upon, could have seriously damaged Tesla’s long-term prospects.

“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. I mean, those guys are corporate terrorists,” the billionaire said. 

Musk’s comments coincide with Tesla’s leadership urging investors to support his record-breaking pay proposal ahead of the crucial vote on Nov. 6. The plan, set to be one of the biggest ever offered to a corporate executive, could see Musk receive as much as $1 trillion in stock if he meets a demanding set of goals, including lifting Tesla’s valuation to $8.5 trillion and achieving a dozen specified operational milestones.

While urging shareholders to vote against Musk’s proposed pay package, ISS had said, “While it is recognised that the board seeks to retain Musk due to his track record and vision for Tesla’s future, and further that some shareholders may support this award in light of Musk’s successes in achieving growth of the company, there are unmitigated concerns surrounding the special award’s magnitude and design.”

In his closing comments on the earnings call, Tesla’s Chief Financial Officer, Vaibhav Taneja, stressed that the committee responsible for crafting Elon Musk’s compensation proposal designed it so that he would only benefit if shareholders gained substantial value. Taneja reiterated his appeal for investors to back the plan, underscoring its alignment with shareholder interests.