Influential Non-Profit Group Comes Out Against Elon Musk's Big Payday

Elon Musk 15 photos
Photo: Tesla on YouTube | Edited
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More Perfect Union, a non-profit organization that claims to advocate for working-class Americans, says Elon Musk's reward for transforming Tesla into the world's most valuable automaker is way too generous, and he shouldn't get it. But are they right?
New York City Comptroller Brad Lander, whom we'll imagine as the Big Apple's Chief Financial Officer (CFO), told More Perfect Union that he couldn't think of a company that would hand its CEO $56 billion. The man doubled down and pointed out that Elon Musk is distracted and acts as a part-time executive, which might "pull the company in bad directions."

Lander, who says that $56 billion is a stratospheric sum, is actively involved in taking away the promised pay package from Tesla's boss. He and other shareholders have been trying to convince as many Tesla investors as possible to vote against the implementation of the deal for quite some time. The outcome will be known on June 13, after the annual shareholder meeting ends.

More Perfect Union continues and underlines that Tesla's stock price has dropped by more than 40 percent since January 2024, sales are in a downtrend, (surprise) layoffs continue, and the almost-ready affordable Model 2 was scrapped and replaced with what should be a cheaper Model 3-inspired robotaxi. It also blames Elon Musk for tweeting and launching ChatGPT-rival xAI while all these things transpired.

Brad Lander agrees and says that pivoting the company toward a robotaxi that may or may not enjoy any real market success is a sign that Musk has deviated from Tesla's mission to make EVs. It's worth noting that the brand's mission is to "accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible."

Elon Musk
Photo: Tesla on YouTube
The organization also touched on Elon Musk's political preferences, mainly showing that he seems to favor Republican Presidential candidate Donald Trump, who has stated on multiple occasions that electric vehicles (EVs) aren't as good as some might want them to be. The former Commander in Chief also alluded to EVs representing a means of coercion because "they don't go very far."

Troubling behavior

Lander believes that Musk might have alienated the car company's core customer base because of his public behavior and suspects that the CEO may wish to transform the automaker into a different type of company that may not enjoy the same success as Tesla did in the past two and a half years.

Keep in mind that the Model Y became the world's best-selling car last year, marking two premieres: an EV became more popular than the rational choice Toyota Corolla, and the brand that no one gave a chance over a decade ago pushed a zero-tailpipe emission commuting appliance to global dominance.

However, it's worth pointing out that Elon Musk has been adamant about Full Self-Driving's success since 2020 and has declared on multiple occasions that solving autonomy would be the difference between Tesla being worth a lot or nothing.

Elon Musk
Photo: Tesla on YouTube
The Comptroller's involvement in this situation isn't weird, even if it may seem so at first. The man is trying to protect people's future, specifically their pensions (and, arguably, their 401(k)s). NYC employees contribute to a retirement fund during their employment and get access to monthly income benefits after retiring. But unlike in countries with a socialist approach, this fund's performance is tied to how its assets perform.

So, Lander has a right to be worried about what's going on at Tesla, and he should act in the best interests of those who rely on the NYC Retirement Fund.

A one-man show

More Perfect Union says that Elon Musk's impressive pay package would lead to a further nine percent drop in the stock's price, which could affect millions of people, not just New Yorkers. The non-profit is also worried about the executive's ownership stake increase. In the event that the pay package is approved, Musk will end up owning over 22 percent of Tesla's stock instead of the almost 13 percent he has now.

The organization also reminds everyone that Elon Musk himself designed the impressive reward and has already been refuted by a Delaware judge, hence the headquarters move to Texas.
NYC's Comptroller also says that Tesla has a "bro board" because so many of Tesla's board members are related to Elon Musk or friends with the CEO.

Brad Lander
Photo: More Perfect Union on YouTube
On the other hand, More Perfect Union is worried that Elon Musk receiving $56 billion in stock form could "fundamentally undermine the integrity of corporate governance."

While that sounds bad and somewhat scary, I can't see how Elon Musk's getting his stock would negatively affect investors and customers in the long run. "Move fast and break things" has been the CEO's motto for quite a while, and, despite that he treats employees like disposable robots, few failures can be attributed to Elon Musk. Even the Twitter saga ended in his favor, and that's after he didn't even want to really buy it.

Don't get me wrong, the social media platform still feels like a hot mess. However, Musk's way of running things has proven effective. Twitter (now X) is still alive and might even make Tesla's CEO some money.

Granted, I'm no stock guru, a Tesla investor, or well-versed in corporate shenanigans. But one thing's clear: there was a deal. And it wasn't secret.

Elon Musk
Photo: Tesla on YouTube

The right path forward may not be ideal, but it at least provides a way out (of whatever this is)

Post-2018, Elon Musk didn't get a salary, a bonus, or any other type of yearly compensation as Tesla's CEO. The agreement was that he would continue at the EV maker's helm for another six years. If, during his tenure, the company was to perform incredibly well, then he would receive around one percent of the company's stock for each milestone reached.

On top of that, his shares would vest over a period of five years. He wouldn't be able to sell and he wouldn't want to bury Tesla or treat it worse than he's already doing. Still, he could technically borrow against them because these shares would be his.

Do note that the proposal was accepted while the marque was fighting for its life. The Model 3 production ramp-up almost destroyed Tesla. Despite appearances, the brand

When the deal was made, Tesla was worth around $58 billion and change. At the time of writing, the automaker's market capitalization sits at a healthy $559 billion. That's an over 10X increase.

Elon Musk
Photo: Tesla on YouTube
Yes, Elon Musk can be insufferable, and trust me, it feels horrible to advocate in a billionaire's favor. However, he is entitled to a big payday. The 2018 deal included targets that many experts considered wild and in no way feasible at the time.

A decision must be made

The CEO (together with tens of thousands of people and hundreds of partners) delivered. Now, the shareholders should do the same. It's only fair.

Do shareholders want a more involved CEO who treats Tesla as their utmost priority and doesn't have multiple side hustles? Well... The solution exists: just fire Elon Musk and pick someone like Jim Farley or RJ Scaringe.

However, Elon Musk could leave before anyone finds a suitable replacement. Rumors already indicate that the prolific entrepreneur might give up on the automaker if he doesn't get his $56 billion that may be worth nothing, half, or double the amount until he's able to sell.

Ultimately, maybe Tesla should focus less on PR battles (it's even paying for ads on social media platforms or forums now) and start prioritizing adding more skilled people to service centers, improve the Model Y like it did with the Model 3 (adding stalks and a head-up display would be amazing), build a new Model S that can rival the Lucid Air, bring forward a new Model X with a real third row of seats, and fix the Cybertruck.

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About the author: Florin Amariei
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Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one.
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