Tesla’s latest master plan is, as I noted here, too vague to be an actual plan. The real details have dropped soon after in the form of a proxy statement. This is largely an extended argument for a new, roughly trillion-dollar compensation plan for Chief Executive Elon Musk. It serves to both embellish Tesla’s latest pitch and remind everyone, even if unintentionally, of the company’s hollow governance.
Over the past two years, Tesla’s core electric vehicle business has flipped from growth to decline, amid setbacks such as the Cybertruck flop and the politicization of the brand, both of which Musk owns. During that time, however, the board has appeared to mostly engage itself in restoring a multibillion-dollar compensation package for Musk that was agreed in 2018 but struck down by a Delaware court over conflicts of interest and disclosure issues.
The board pushed shareholders to revalidate the compensation package — which the Delaware court effectively ruled as irrelevant — and switch Tesla’s incorporation to Texas. It has since granted Musk an "interim” award of restricted stock units, currently worth about $32 billion, that will vest if the company’s appeal in Delaware fails and he sticks around for another two years. It now proposes a new set of multitranche stock payments that mimic Musk’s 2018 package but at vastly higher thresholds, since Tesla is already valued at more than $1 trillion.
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