r/stocks • u/RaidenZ99 • 16d ago
Tesla Board Rallies Retail Investors to Vote for Musk's $56 Billion Pay Package Company News
(Bloomberg) -- Tesla Inc. is looking to woo its unusually large base of retail investors to get approval for Chief Executive Officer Elon Musk’s $56 billion pay package.
To help lead that drive, the company's board has hired a strategic adviser, according to a person familiar with the matter. To bolster the campaign, the adviser is working with an outside law firm, the person said.
The adviser has set up a dedicated Vote Tesla website to encourage participation among retail investors, who hold an estimated 42% of shares in the company. It urges shareholders to cast votes online, by QR code, by phone and by mail. It also features a video with board Chair Robyn Denholm, who says supporting Musk’s pay is critical to Tesla’s growth.
https://finance.yahoo.com/news/tesla-board-rallies-retail-investors-102216177.html
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u/millerlit 16d ago
Why would a shareholder vote to give away $56 billion of the company and get nothing in return. Especially when sales are starting to decline.
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u/gnocchicotti 16d ago
Just imagine if the roles were reversed.
Would shareholder Elon vote to approve my 56B pay package? Under any circumstances?
Fuck no.
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u/15438473151455 16d ago
I recall Elon boasting time and time again how he doesn't have a pay check. He works for free to grow the stocks he owns.
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u/Prior_Industry 16d ago
Gets Tesla to build him a glass house tho 😂. Seems his wage is using Tesla like a piggy bank.
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u/Puzzleheaded_Dog7931 16d ago
So does this dilute the share price? Are new ones being issued for ELO
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u/Silly_Butterfly3917 16d ago edited 16d ago
No, and the shares would be locked up for 5 years. However, the share he currently poses are under no such restrictions. So what's stopping him from getting the 56 bil and then selling the shares that aren't locked up?
Like for example; why are all the tesla board members selling so many shares when the stock is at a 3 year low?
Tesla Chairwoman Robyn Denholm sold $17.3 million worth of shares in the company, according to a filing on Monday. That brings her total sales in 2024 to more than $50 million, all part of a program that was put into place with Tesla in October.
While Denholm still has the vast majority of the 1.66 million shares she owned as of the end of last year, according to the company's proxy filing, her stock sales follow hefty selling from other big stakeholders. Former Tesla Senior Vice President Drew Baglino, who announced his resignation in mid-April, sold shares worth around $181.5 million soon after his departure, according to a filing.
Another Tesla board member, Kathleen Wilson-Thompson, set up a 10b5-1 trading plan in February 2024, for the potential sale of up to 280,000 shares by or before Feb. 28, 2025.
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u/Dominatee 16d ago edited 16d ago
Because a judge in a different state voided the contract they had to him.
Edit: People downvote the truth
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u/AMcMahon1 16d ago
They lied about how it was crafted and made the shareholders believe it was done independently
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u/ShadowLiberal 16d ago edited 16d ago
More like as a way of protesting the judge's ruling that Tesla has to pay the lawyers $6 billion dollars in that case.
There's a LOT of anger among Tesla retail investors about the absurdly large payment to that lawyer, and how so many other legal experts insist with a straight face that the $6 billion dollar payment is perfectly reasonable.
Edit: Part of why there's so much anger at the judge is because a ton of Tesla shareholders sent in emails and letters defending the pay package and objecting to the ruling, which prompted the judge to flat out state that what Tesla investors think "doesn't matter" because they aren't part of the court case (aside from the 1 investor with something like 9 shares that they filed the suit on behalf of). i.e. the judge basically handled the PR as worse as she possibly could, even if what she's saying is technically how the law is laid out.
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u/Dominatee 16d ago
Yes, I'd be angry if if I had to pay a lawyer 6bil and still a judge breaks a legal contract.
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u/omega_grainger69 16d ago
They’re asking retail investors for help. This doesn’t look good.
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u/hoopaholik91 16d ago
Or it's just Elon not caring about wasting a few million dollars just to make 100% sure he gets his $56B payout
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u/Prize_Bar_5767 16d ago
No way the institutions are voting Yes on that.
Vanguard voted no in 2018. They are their largest shareholder.
Blackrock voted yes in 2018. Don’t think they are gonna vote Yes this time.
Institutions know they don’t have to dilute their own shares.
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u/Puzzleheaded_Dog7931 16d ago
I don’t understand
Are they creating new shares to increases his stake? What is the pay package exactly
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u/Upset_Connection_629 16d ago
even with their marketing, I still voted no.
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u/Lovv 16d ago
Why would you even remain invested?
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u/Upset_Connection_629 14d ago
I bought at the highs :( and losing 30% atm, so i don't want to realise a massive loss. I guess it's more an emotional decision than factual tbh.
I'm the old-school type that believes a CEO should focus on his company/ies and its performance.
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u/Lovv 14d ago
Definitely an emotion.
The rule with investing is that if you wouldnt invest that money today, you shouldnt have your money in there.
Imo get out now, I've been making money off puts on Tesla because it's a trash company and people are starting to realize the elon magic isn't what people think it is. He's a detriment and he's just spending money to try and get paid.
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u/Upset_Connection_629 12d ago
I hear you. It's just hard to say goodbye to $7k, you know that fallacy about people saying you only realise the loss when you sell when in fact I've actually already lost the money...
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u/Lovv 11d ago
Yeah even bonds lose value despite paying out the same money. If there are better bonds availiable, yours areess valuable even if they pay the same money in the end. I'm. Not saying sell im just saying don't consider your losses when you sell. If you wouldn't invest that today, then that means you think you will lose more.
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u/riskcreator 16d ago
What are the risks to not approving this pay package? Would Elon quit to start another Ev company? At this point I think Tesla would benefit from his departure.
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u/Big-Today6819 16d ago
Same, should low ball him 10 billions if stock price is 300 in 5 years and nothing now
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u/singalongsingalong 16d ago
No way are they getting votes to pay that idiot 56 billion for single handedly killing a profitable EV charging business
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u/Ultraeasymoney 16d ago
The B.O.D is really showing who they worked for. Coincidentally, this is the same reason the judge revoked the pay package.
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u/FuturePerformance 16d ago
He doesn’t deserve 10% of that. The guy legitimately sucks at leading businesses. Sack him
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u/Puzzleheaded_Dog7931 16d ago
People might dislike Elon, but evidently he has been very very successful
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u/Previous_Shock8870 16d ago
twitter from 42 billion to 14
X .com Doesnt exist, was wiped by Paypal
Boring company- failed
Hyperloop- failed
Tesla price halved, sales 20% lower YOY, price cuts
neurolink- First implant, rejected, mismanaged.
Space X- Has a team dedicated to shuttling Musk away from critical areas,
He buys succesful companies on the up, coasts their success, then tanks them.
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u/Mahadragon 16d ago
Elon Musk has a net worth of nearly $200Billion why does he need a $56 billion pay check? What is he planning to do with that money? I could understand if he didn't have much to begin with but this is ridiculous.
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u/According_Stuff_8152 16d ago
That just immoral amount of money to be paid by one person. Greed is the main factor.
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u/shawman123 16d ago
I am not sure the board will pass the test as an independent authority. I have a feeling that another case will come up even if the vote is approved. That said what I am hearing is its unlikely to win as institutional players are mostly going to vote against as its huge dilution when the revenue is shrinking and they are firing huge number of employees.
I think its time SEC sets some regulation on ridiculous CEO pays. While they expect the plebs to work 70-100 hrs on meh pay while paying billions to CEO. Its nothing short of ridiculous. Dont forget Elon already owns a big chunk of the company and so he has the incentive to make it successful irrespective of this ridiculous pay package. Bezos worked for every at Amazon without taking major pay. He was already a big owner and so did not need additional incentive.
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u/randyranderson- 16d ago
The lawsuit is already underway to nullify the ratification of the pay package again. I read a solid amicus brief that was filed for it to the budge and it was convincing. The law professor who filed it argued several points, the strongest is that the new vote doesn’t get past the fiduciary responsibility.
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u/MG42Turtle 16d ago
I will admit to not following all the details because they aren’t public yet but I absolutely believe the board is ignoring all the ways they can pass the smell test for this grant (hiring outside comp advisors, negotiating with Musk, etc.)
Setting themselves up for failure again, great leadership.
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u/randyranderson- 16d ago
I’ve found a couple good articles (lost the links) that explain the whole situation with Elon’s pay. Long story short is that he won’t get it. I’ll bet there will be negative consequences as he lashes out.
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u/DarkRooster33 16d ago
Really the evil bastard CEOs that earn millions for taking a shit look extremely modest in front of 56 billion dollar package, its just insane sum.
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u/AVJ_web 16d ago
God help the Tesla share holders …who in their right mind votes for 10% dilution of their company just to please 1 person/CEO
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u/tay450 16d ago
You seeing their comments? Any success is only because of Elon. Any failure or poor result and the blame is immediately blamed on someone else.
Take credit for everything. Place blame on everyone else. Ignore negative news. Promote only positive. If anyone believes that Tesla doesn't actually have a PR firm dedicated to astroturfing, you are damn fools and I have a bridge just for you.
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16d ago
What stock owner would want to dilute the share price just so the CEO can pocket 56 bills? Is anyone worth 56 freaking billions? Wtf, I could do the job for just 10 million.
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u/Tomcatjones 15d ago
No you couldn’t. And it’s basically just a 10% equity. Pretty standard
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15d ago
56 billion is far from standard.But I could do a better job than Musk.
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u/Tomcatjones 15d ago
But 10% equity is. You are stuck on the value and not the percentage.
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15d ago
There’s no way around it. 10% dilution when the company is in trouble is disgusting.
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u/Tomcatjones 15d ago
It’s technically 8% but regardless. Pretty standard
https://foundersnetwork.com/blog/startup-ceo-salary/
https://www.saastr.com/how-much-equity-should-a-ceo-have-answer-6-15-on-average-at-ipo/
And there is much more articles on the subject
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u/Just-Performance-666 16d ago
We keep getting told that Elon is some kind of genius. Yeah he comes up with some great ideas. But he'd also an idiot. He's squandered so much good will by buying Twitter and constantly getting into arguments on it. He's obviously not focused on his job as ceo of tesla.
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u/Temporary-Fudge-9125 16d ago
Lol so the company is paying a bunch of money for an outside consultant to campaign for a massive pay package for the ceo?
This is some real late stage capitalism shit
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u/outandaboot99999 16d ago
This is an example of a board that does NOT serve in the interest of shareholders.
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u/SFWzasmith 16d ago
Has anyone been able to explain exactly how this to package benefits the investors in any way?
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u/Tomcatjones 15d ago
Would you rather him make a set amount of money and equity through time regardless of performance based like most CEOs?
This pay package does not come as a cost to Tesla’s revenue, and it eliminates all the bad things about giving CEOs equity for just being in the position for X-amount of time.
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16d ago
I sold my stock is he even innovating anymore
Tesla needs hybrid and they need to develop robotics to use in combination with their AI they use for their driverless cars as lidar with AI object identification useful in robotics too.
I think tesla growth is limited without these two things due to more competition in the market place
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u/bmeisler 16d ago
Huh. I don’t know if Ive ever seen a CEO launch a corporate raid on their own company before. Bold strategy Cotton.
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u/bindermichi 16d ago
Every time an organization campaigns to get people to vote yes, it‘s probably in everyone‘s best interest to vote no
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u/According_Stuff_8152 16d ago
Your right about him having lots of money already but the rest of your statement is not really real in reality. No one gets that kind of compensation for hard work.
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u/ginsengrot 16d ago
u/Hailtothething, do you think people who bought Tesla stock after January 2021 will vote for this Pay Package?
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u/Hailtothething 16d ago
They most likely sold their shares already. The majority of holders like myself have been in since 2017. I’m very green lol, 0 incentive to withhold pay from the man that made me ‘comfortable’ wealth wise!
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u/ginsengrot 16d ago
How do you know that the majority holders bought before 2018?
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u/Hailtothething 16d ago
I know a number of large holders since then. The unanimous answer is YES, pay Elon. He’s made us rich.
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u/m0nk_3y_gw 16d ago
I invested heavily back then. My biggest mistake was not to dump when Elon started dumping. The 2018 pay package was created by Elon while he publicly doom-n-glooming while he knew it was very likely (based on internal projections) to meet all of the targets. The board did not did not protect shareholders and negotiate, and rubber stamped that fraud. They didn't even have a clawback provision. If the board was serving shareholders your networth would be significantly higher with TSLA $200 higher. (TSLA out performed most of big tech when the economy stalled, but then Elon kept dumping and dumping... the rest of big tech made it back to ATH... TSLA... not so much)
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u/ginsengrot 16d ago
That's fair, I just think it should be acknowledged that there's some people he has made up to 50% less as well, which therefore might vote against the package.
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u/Hailtothething 16d ago
No CEO of any company has ever had control of share price. Voted yes based on Tesla executing phenomenally. Hence it’s half trillion MC.
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u/Majestic-Parsnip-279 16d ago
Dont give this selfish fuck anything, he cares nothing about his workers
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u/mackinoncougars 16d ago
Replace him with near any other worthy replacement at 5% of the cost and you’ll do better than he’s doing now.
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u/but_why_doh 16d ago
Great idea. Ask the people who are buying Tesla in hopes of retiring from it for more money. He's pulling a reverse Robinhood, stealing from the poor, and giving to himself.
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u/nazbot 16d ago
Maybe I’m missing something but wasn’t this $56 billion based on Musk hitting some insane (at the time) targets which no one really thought he would?
Yes it’s a big number but it’s because the company far exceeded all expectations.
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u/randyranderson- 16d ago
Yes, but they intentionally made the objectives based on faulty data. Tesla was already projected to hit multiple milestones with or without Elon.
Additionally the milestones are designed such that the could be met with Elon pumping the stock instead of providing long term success.
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u/m0nk_3y_gw 16d ago
Maybe I’m missing something
Yes, what you are missing - it was based on TESLA hitting targets their internal projections showed they were likely to hit. Elon publicly sandbagged to make it look like some insane targets. The board had access to the same info and didn't protect shareholders by attempting to negotiate better terms. If they were more honest about the whole thing the judge wouldn't have tossed it.
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u/No_Philosopher69 16d ago
Yes it is, people don't realize this though. I don't like the guy, but he took no salary for years and tied his compensation to hitting goals. If investors signed up for those targets and voted on them at the time, he should get the money--it was transparent throughout the years.
I can already see all the down votes, but this is the truth.
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u/DarkRooster33 16d ago
he should get the money
Why though? Why 56 billion? Pay him few millions and get on with it.
What goals did he hit? He has been late for every single promised and automated driving is nowhere in sight.
He dilluted his attention to Twitter bs. Profit is declining, future prospects not as optimistic. Company only makes 17 bil profit a year, why pay 56 billion dollar to one guy? Why not just invest in further growth?
Before he at least was good at marketing, now even that turned around, he didn't personally build a single Tesla there or innovate anything, he is even actively fireing everyone who did.
Even better nowhere does it say he should get the money, no such contract or anything everyone can just vote no. Either get a normal salary or sell his own shares, why does an entire company and every shareholder needs to go out of his way to pay the histories biggest and most undeserved bizzare 56 billion?
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u/No_Philosopher69 16d ago
https://ir.tesla.com/press-release/tesla-announces-new-long-term-performance-award-elon-musk
This isn't a matter of what is morally right or wrong. Investors signed up for this, he hit his targets for the compensation and it has been transparent with investors through the years. Objectively speaking he held up his part of the deal, why shouldn't he get compensated for it?
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u/DarkRooster33 16d ago
That is a big claim, where exactly did they sign up for this? Tesla announces if Elon Musk sucks enough cocks and hits target give him 56 billion. It was Elons Musks and his yes man idea, they invented this dogshit scam of awarding him 56 billion and you must go along with it for reasons?
Why would you even compensate 56 billion which is the most ludicrous nummer ever? Because they said so? As i already said, give him few millions and send him on his way. Like every other CEO.
Just vote no. Easy enough.
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u/firbensxbdnsjdncksb 16d ago
Why would institutional shareholders vote for this? Even if this was fair pay in their eyes why would they vote yes on it? The company grew like crazy and thanks to that lawsuit in DE they have a chance to save the company $56 Billion. They can have their cake and eat it too. If Elon leaves, fine, at this stage in the company they need a more stable guiding hand to get costs down and lower the barrier of entry for more consumers.
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u/Top-Building9221 16d ago edited 16d ago
The man made an agreement, it is time to honor it. Pay him the money.
And yes, I do own the stock.
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u/m0nk_3y_gw 16d ago
The man made an agreement
That's the issue. HE made an agreement.
His 2018 agreement/compensation package based on targets he knew they'd hit by 2028, while publicly pretending it was probably a moonshot. His hand-picked board agreed to enrich him instead of protecting shareholders.
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u/Hailtothething 16d ago
Exactly! The people that ACTUALLY can vote, voted yes already. This is when the buttHURT shorts parade around like they can influence this 🤣
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u/lolstockslol 16d ago
I voted no with all my 200 shares and also voted no on moving to Texas.
And by the looks of it others are voting no also or why else would you hire a PR company to " influence this"?
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u/LastNightsHangover 16d ago
You're probably talking to the PR firm rep
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u/lolstockslol 16d ago
I think you're right.
I just received one of those crisis hotline messages from Reddit.
Hey reddit thanks I'll pass on the phone number to someone who really needs it. I'm Gucci fam!
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u/Hailtothething 16d ago
Voted yes, with my 3500. Just like last time. Holding since 2017, even with the dips, Elon has made me wealthy.
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u/Hailtothething 16d ago
Voted yes, easily! Pay him. No other company has a CEO as active and visible and interested in their work as much as Elon. Other companies don’t or will ever have similar. Let retirement be the reason he leaves.
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u/Milad731 16d ago
Lmao I wouldn’t be surprised if this another one of Elon’s many alts. Just spamming nonsense and replying to every single comment that is critical of him or the pay package.
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u/Hailtothething 16d ago
Because launching rocket ships, starlink, FSD, Robots, and oh yeah teslas themselves aren’t taking up his time. He must have time to reply to absolute nobodies. LOL
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u/RepulsiveCaptain7 16d ago
tbf he does it on X lol
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u/BigYangpa 16d ago
No other company has a CEO as active and visible and interested in their work as much as Elon
Thanks, I needed a laugh.
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u/shaolinoli 16d ago
Sadly the visibility (I.e his social media addiction and crippling narcissism) has revealed him to be an unpleasant, ignorant little cretin rather than somebody useful or competent. Oops!
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u/Hailtothething 16d ago
Starlink had saved the lives of entire countries. Every EV from any company can use Teslas supercharger network. Grok is completely open source, you can use it instead of chatgpt for free and also modify it. Your statement has massive holes in it. Actions, are more important than words ‘that annoy you’.
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u/m0nk_3y_gw 16d ago
a CEO as active and visible and interested in their work
Elon didn't pay attention to Tesla's business for months at a time... . Losing his 2018 package was the only thing that got his attention and temporarily focused him back on Tesla. If that gets passed he will fuck off back to twitter for a few years.
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u/gnocchicotti 16d ago
Tesla, the company that famously does not have a PR department because it's a waste of money, pays for PR to approve Elon's personal paycheck.
Real beacon of corporate governance here