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In today’s big story, we’re looking at the drama between Tesla shareholders over Elon Musk’s bumper pay package that gets decided on today.
What’s on deck:
But first, pay that man his money.
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The big story
Show Elon the money
One of the world’s richest men is fighting over how much he gets paid.
As funny as that sounds, the battle over Elon Musk’s pay package is no joke.
Tesla’s annual shareholder meeting this afternoon will announce the result of the investor vote on Musk’s compensation plan (which was once valued at around $55 billion), but Musk is already claiming an early victory. Business Insider’s Grace Kay has the full rundown on what’s at stake and how it could play out.
On one side sits large investment firms that feel the package is a tad too rich for their blood. They also point to Musk’s chummy relationship with some Tesla board members (like his brother) for why the package shouldn’t get approved.
And they’re not alone. A Delaware judge voided the plan in January, deeming it an “unfair price.”
On the other side are Musk fans, of which there are many. Retail investors hold roughly 44% of Tesla’s shares, the highest mark among the 10 largest companies in the S&P 500.
From their perspective, the pitch is simple: Trust in Musk. The billionaire is a lightning rod for controversy, but he’s turned Tesla’s stock into a rocket ship — 2024 aside — making them rich. And for many shareholders, that’s all that matters.
The lead-up to today’s results hasn’t been pretty.
Earlier this year, Musk gave investors an ultimatum. Meet his comp demands, or he’ll prefer to build AI and robotics products “outside of Tesla.”
Plenty scoffed at the idea he’d take his ball and go home, leaving Tesla high and dry. But Tesla’s board chair hinted it’s not an empty threat.
To that point, Musk recently diverted a $500 million shipment of Nvidia chips from Tesla to X. Musk, for his part, said the chips were rerouted because Tesla didn’t have space for them.
The episode points to a common criticism of Musk: He has too many jobs. One longtime Tesla investor said the EV maker is “kind of the bottom of the pecking pole of Elon’s companies.”
Musk has spun that to his advantage, suggesting his business empire is a “Muskonomy” that Tesla benefits from being a part of.
But that empire came with some negative press this week. An extensive report from The Wall Street Journal made claims about Musk’s interactions with female SpaceX employees, including an accusation of asking a direct report to have his babies.
SpaceX’s chief operating officer, Gwynne Shotwell, said in a statement to the Journal: “The untruths, mischaracterizations, and revisionist history in your email paint a completely misleading narrative.”
As for Tesla, plenty view Musk as too intertwined with the company not to meet his demands. Tesla’s board chair said while the EV maker could exist without him, it needs him right now.
But a billionaire investor who backs the pay package was more direct: Without Musk, there is “no Tesla.”
What do you think? Vote here on if you’re for or against Musk’s pay package.
3 things in markets
- Still no interest rate cuts, but there are some signs of hope. The Federal Reserve continued its pause of interest-rate hikes. But despite a cool May inflation report, the central bank has only penciled in one rate cut this year.
- Blackstone stretches out in the Big Apple. The private-equity giant is finalizing a deal to expand its Manhattan headquarters by 30%. The extra space will be well used, as the firm has grown its headcount by roughly 50% in recent years.
- The race to be the world’s most valuable company is back on. Apple briefly passed Microsoft in market valuation terms on Wednesday as investor reaction to its WWDC event powered its shares higher. The two tech giants and AI darling Nvidia are now competing to become the first-ever $4 trillion company, Wedbush analyst Dan Ives said in a research note.
3 things in tech
- Henrik Fisker’s second automotive startup is on the brink of bankruptcy. Fisker was pitched as a Tesla rival, but workers say mismanagement and cutting corners led to compounding problems. BI spoke with 27 former and current staff who charted the startup’s downfall.
- Some investors backing venture firms are reneging on their deals. An increasing number of LPs like pension funds and family offices are defaulting on their positions with VCs they pledged to fund. And that’s created an opportunity for one VC to buy up their stakes.
- Meta’s upper ranks are feeling the heat. The social media giant is looking to whittle down its hundreds of vice presidents, three people with knowledge of the company told BI, as CEO Mark Zuckerberg seeks to streamline reporting structures.
3 things in business
- Travel agents are back. Gen Zers and millennials are traveling more than other generations, but they don’t want to plan the trips themselves. Instead, they’re turning to travel agents, and reviving the old-school industry.
- Game over for Netflix’s video game boss. The streaming giant just can’t figure out what to do with video games, which might be why its leader Mike Verdu is moving on after three years at the helm. Details around his departure are murky, and it’s unclear who will succeed him.
- Adobe staff hit back. The software company upset many artists and designers recently by implying it would use their content to train AI models. While it sought to quell their concerns in a blog post, some of its workers have taken to Slack to complain about Adobe’s poor response to the controversy and demand a better long-term communication plan.
In other news
What’s happening today
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. George Glover, reporter, in London.
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