Elon Musk, the CEO of Tesla and SpaceX, is seeking to increase his influence over Tesla by having 25% voting control.
According to Breitbart News, Musk threatened to build products outside of Tesla if his demands were not met.
According to multiple reports, Musk’s demand came after his stake in the company, previously around 22%, was reduced when he offloaded shares to partially fund his $40 billion acquisition of X, formally known as Twitter.
“Musk is Tesla and Tesla is Musk and AI is a key to the future of Tesla,” Dan Ives, a managing director of equity research at the investment firm Wedbush, said in a memo to investors on Tuesday.
According to Ives, Musk currently owns roughly 13% of Tesla, about 411 million shares out of the 3.19 billion shares in common stock outstanding, as reported in the company’s latest financial filing for the third quarter of 2023.
Tesla is best known for its electric vehicle manufacturing, but Musk noted in his X post that the company is far more than a car maker.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned,” Musk wrote on X. “Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand that Tesla is not one startup, but a dozen. Simply look at the delta between what Tesla does and GM. As for stock ownership itself being enough motivation, Fidelity and other own similar stakes to me. Why don’t they show up for work?”
I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand…
— Elon Musk (@elonmusk) January 15, 2024
In 2022, Musk predicted that Tesla’s humanoid robot, Optimus, would overtake the value of its car business and full self-driving technology. He emphasized the major investments Tesla has made in the AI and robotics space during Tesla AI Day in September 2022, Breitbart News reports
Shareholders previously sued Musk and Tesla in 2018 with reports that his $56 billion pay package was excessive and made him one of the richest people in the world.
Musk also noted on Monday that Tesla’s board of directors is waiting to establish a new compensation plan for him until the Tornetta case is decided in the Delaware Chancery Court.
“If I have 25%, it means I am influential, but can be overridden if twice as many shareholders vote against me vs for me. At 15% or lower, the for/against ratio to override me makes a takeover by dubious interests too easy.”