\n<\/p>\n
This is an edition of The Atlantic Daily, a newsletter that guides you through the biggest stories of the day, helps you discover new ideas, and recommends the best in culture. Sign up for it here.<\/p>\n
Elon Musk wants to be anointed the world\u2019s first trillionaire\u2014but he swears it\u2019s not about the money.<\/p>\n
Over the past few weeks, the Tesla CEO has been demanding greater power over the electric-vehicle manufacturer that he has led for almost two decades. Specifically, he is asking for another 12 percent of the company\u2014a stake currently worth roughly $190 billion. If shareholders vote for it, and if Musk meets the board\u2019s goals for drastically increasing the company\u2019s value, the total value of his personal stake will shoot up to $1 trillion. At Tesla\u2019s annual meeting on Thursday, shareholders will finish voting on whether to give him both more money and more control over the company\u2019s governance\u2014or to give him neither.<\/p>\n
The compensation package is partly a reflection of Tesla\u2019s changing priorities. The company\u2019s \u201cMaster Plan IV,\u201d released in September, \u201cmakes no mention of any new electric cars in the works,\u201d Patrick George recently wrote in The Atlantic. \u201cIt is instead a technocratic fever dream, predicting a future in which humanoid robots made by Tesla free us from mundane tasks and create a utopia of \u2018sustainable abundance.\u2019\u201d Tesla\u2019s board has said that the compensation package will help motivate Musk to pursue these innovations; in the company\u2019s third-quarter earnings call last month, robots\u2014not money\u2014were at the heart of Musk\u2019s argument for more shares. \u201cIf I go ahead and build this enormous robot army, can I just be ousted at some point in the future?\u201d he asked.<\/p>\n
As the world\u2019s richest man and the CEO of several companies, Musk exerts an enormous amount of influence over many people\u2019s lives, but Tesla\u2019s structure does include some checks on that power. Tesla is, on paper, overseen by those who actually own the company\u2014which isn\u2019t always the case at other public companies. Mark Zuckerberg, for example, owns about 13 percent of Meta, but as of last year, he controls 61 percent of the total voting power, thanks to a special class of stock that grants him outsize sway over corporate governance. This system is not a democratic representation of all shareholders\u2019 views, but it is nevertheless popular among today\u2019s tech companies. Snap Inc. (the parent company of Snapchat) is perhaps the most extreme example; its two co-founders control more than 99 percent of the vote.<\/p>\n
The fact that a vote against Tesla\u2019s pay package is even technically possible is a reflection of a not-so-monopolized voting structure. Companies often have valid reasons for deciding to centralize so much control in the hands of a few individuals (dissenters can make it hard for boardrooms to move quickly on decisions, and outside interests can dilute a founder\u2019s vision, to name two). But that centralization can also lead to something of a shareholder monarchy. Although Tesla is already consolidated around Musk, he still doesn\u2019t own a majority of the company. If shareholders were to reject his pay package, they\u2019d be reminding the board that, for now, they still have ultimate say over how the company is run.<\/p>\n
Analysts generally believe that the compensation package will be accepted, because top Tesla shareholders have been content to follow Musk\u2019s lead in the past. The company\u2019s structure should ideally enable a multiplicity of dissenting voices\u2014but more often, shareholders are simply willing to go with the board\u2019s recommendations. This time, however, there has been early and forceful pushback. Some shareholders, including Norges Bank Investment Management, the bank behind the world\u2019s largest sovereign wealth fund, have come out against the plan on the grounds that $1 trillion is simply too much money for a single CEO. Prominent public figures have weighed in too: \u201cWe\u2019re in big trouble,\u201d Pope Leo XIV said of Musk\u2019s possibly becoming a trillionaire.<\/p>\n
But in the world of corporate governance, there are forces far more influential than the pope. Among them are the proxy advisory firms ISS and Glass Lewis, which do market research and advise fund providers such as BlackRock and Vanguard on how to vote their shares. The people invested in BlackRock\u2019s and Vanguard\u2019s funds aren\u2019t all corporate bigwigs; some of them are ordinary people, with pensions and IRA accounts. Most of them won\u2019t vote at Tesla\u2019s shareholder meeting, but BlackRock and Vanguard certainly will. ISS and Glass Lewis have recommended voting against Musk\u2019s pay package, as they\u2019ve done repeatedly in recent years\u2014Musk responded by calling the companies \u201ccorporate terrorists\u201d during last month\u2019s earnings call\u2014although what BlackRock and Vanguard will decide is still unclear.<\/p>\n
Tesla leadership has been mounting a steady campaign to undermine any dissent; a slick website, VoteTesla.com, lays out why voters should approve the pay package. But now the board appears to be scrambling. The chair, Robyn Denholm, who usually eschews public appearances, has been on something of a media tour over the past few weeks, defending the plan. For the board, this vote is existential. As early as last year, Musk was heavily implying that he would leave the company if he couldn\u2019t have that 25 percent stake. If he exits, Tesla\u2019s stock will almost certainly tank.<\/p>\n
Tesla\u2019s board of nine, which includes Musk\u2019s brother, seems to trust him completely. (After rejecting a previously proposed pay package, a Delaware court said that certain board members were not independent, citing concerns about undisclosed \u201cconnections between the members of the Compensation Committee and Musk\u201d; Tesla is appealing the decision.) Whether shareholders outside Musk\u2019s inner circle still maintain that trust is a question that will be answered later this week. Musk said in the earnings call that he wants just enough voting control to retain a \u201cstrong influence.\u201d The conflict over his pay package is a reminder that influence shouldn\u2019t be taken for granted.<\/p>\n
Related:<\/p>\n
Here are three new stories from The Atlantic:<\/strong><\/p>\n Today\u2019s News<\/strong><\/p>\n Evening Read<\/strong><\/p>\n Charles Ommanney \/ Getty<\/p>\n There Was One Dick Cheney All Along<\/p>\n By David Frum<\/p>\n In Vice President Dick Cheney\u2019s later years, former detractors sometimes expressed puzzlement about his political trajectory. The onetime designated villain of the Iraq War had somehow mutated into a hero of the anti-Trump constitutional resistance. Had he changed? Or had they misjudged him?<\/p>\n People do change. Perspectives can shift. But oftentimes the secret to later-life decisions is encoded in early experiences.<\/p>\n Read the full article.<\/p>\n More From The Atlantic<\/em><\/p>\n Culture Break<\/p>\n Listen. The Atlantic is launching a new weekly podcast, Galaxy Brain, hosted by staff writer Charlie Warzel, who is paying attention to where we pay attention.<\/p>\n Read. Michael Gorra explores how the critic Malcolm Cowley made American literature into its own great tradition.<\/p>\n Play our daily crossword.<\/p>\n Rafaela Jinich contributed to this newsletter.<\/p>\n When you buy a book using a link in this newsletter, we receive a commission. Thank you for supporting <\/em>The Atlantic.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" This is an edition of The Atlantic Daily, a newsletter that guides you through the biggest stories of the day, helps you discover new ideas, and recommends the best in culture. Sign up for it here. Elon Musk wants to be anointed the world\u2019s first trillionaire\u2014but he swears it\u2019s not about the money. Over the<\/p>\n","protected":false},"author":1,"featured_media":32229,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[16940,1371,364,18642],"class_list":{"0":"post-32228","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-social-issues","8":"tag-determine","9":"tag-musk","10":"tag-people","11":"tag-trillionaire"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/32228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32228"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/32228\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/32229"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n