Elon Compensation Package

[mongo]

Questions - I'm not clear on the ask.

The Prize - 25% of Tesla. So he's falling below 25%? Now? Soon? Somehow, overall TSLA dilution must be causing this? Yes I know he sold quite a while ago, this is new.

What's the goal then? Has this been clarified? (Robot handsprings, 50% market share in ___ years? 20M Robots by 2030? TSLA at 500 SP by next year?)

He's been below 25% votable shares since 2014 or so.

 

[SOULPEDL]

He's been below 25% votable shares since 2014 or so.

So how much we talking then? Is this known?

 

[mongo]

So how much we talking then? Is this known?

yeppers:

Elon's 2021/2022 sales reduced his projected ownership stake 3.2% (of the company)

Ownership as reported to SEC is share plus option count irrespective of ability to turns those into shares at 1:1. With 50% tax, only half are realizable

Ownership ending 2018: 21.7%, post exercise 21.0%
507,370,200 shares 71,221,650 options (adjusted)
These options are from the 2012 plan, not the 2018

Ownership 2019: 20.8% post exercise: 20.1%
511,283,400 shares 68,596,650 (non-2018)

Ownership 2020: 22.4% post exercise: 20.7%
511,478,955 shares 169,916,850 options (some 2018)

Ownership 2021: 21.2% post exercise: 19.6%
517,824,753 shares 177,320,865 options (only 2018s)

Ownership end 2022: 20.6% post exercise 18.8%
411,051,576 shares 303,971,130 options

Backing out all sales, post exercise he would be at 22.0% (26.9% SEC version)
545,581,725 shares and 303,971,130 options

 

[Buckminster]

https://twitter.com/x/status/1747259631645430155

Gary suggesting a buyback plus comp plan.

Elon doesn’t have to exercise the current options right? If he had a windfall…

 

[mongo]

https://twitter.com/x/status/1747259631645430155

Gary suggesting a buyback plus comp plan.

Elon doesn’t have to exercise the current options right? If he had a windfall…

With Elon executing all his options at a 50% tax rate, it would require a 25% buyback or around $150 billion based on this morning's stock price to get him to 25%

 

[Buckminster]

With Elon executing all his options at a 50% tax rate, it would require a 25% buyback or around $150 billion based on this morning's stock price to get him to 25%

Yeah, which is why Gary’s plan of $80Bn seems a bit more doable.. Apple is sitting on $60Bn after all their buybacks.

 

[Buckminster]

Can we chunk up the elephant further?

40% buyback
20% Elon loan to pay taxes
20% Elon cash in compensation to pay taxes
20% Elon compensation options

 

[heltok]

Buyback plan math assumes:
1. Tesla becomes Choam
2. Stock price remains fixed

 

[mongo]

1. Elon develops X.ai, X, X.payments
2. Tesla acquires X in an all stock deal at 10% of Tesla's market cap
3. Elon gets 80% of price resulting in ownership of 25% of Tesla
Adjust percentages as desired
Optional:
4. Tesla acquires Starlink
5. Tesla acquires Boring

 

[kabin]

Depending on his actions, I wouldn't be surprised if Elon had a few more lawsuits coming his way.

The outspoken billionaire said on Monday he would be "uncomfortable" building Tesla into a leader in the technologies unless he has about 25% voting control at the company.

"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," he said on his X social media.

The move marked an abrupt turn for Musk, who has long touted Tesla as an "AI/robotics company" due to its partially automated "Full Self-Driving" software and prototype humanoid robots.

"The problem is his tweets suggest that in his capacity now as CEO and director, he is not only turning down profitable Tesla opportunities based on his personal preferences, but also redirecting them to his private companies," said Ann Lipton, a professor at Tulane Law School.

"That's a conflict of interest that suggests a violation of his fiduciary duties to Tesla."

https://www.reuters.com/technology/...stake-raises-governance-questions-2024-01-16/

 

[Christine69420]

Not watched this yet:

 

[MC3OZ]

1. Elon develops X.ai, X, X.payments
2. Tesla acquires X in an all stock deal at 10% of Tesla's market cap
3. Elon gets 80% of price resulting in ownership of 25% of Tesla
Adjust percentages as desired
Optional:
4. Tesla acquires Starlink
5. Tesla acquires Boring

I was thinking along similar lines with my Tesla-Ai proposal, it makes sense to get Grok inside the Tesla-AI tent, and hopefully retain some of the team. Tesla-AI could merge with X.ai and there would be dilution, but only to Tesla-AI, the process might lift Elon's ownership of Tesla-AI to 25%, and a share class with special voting rights might not be required.

I can see why new classes of shares with different voting rights can't be added to companies after formation, it isn't fair to existing shareholders.

Even my Tesla-AI proposal to create a new company with different share ls classes might be stuck down, because it is a clear attempt to side-step the principle above.

Elon only needs to own 25% of Tesla-AI, not 25% of Tesla.

Why does Elon think this is important? Elon seems to think the team stumbled on the path to AGI when working on FSD and the combination of AGI + Optimus is very powerful. Elon also seems to think that it would not easy for others to replicate that AGI discovery, at least for a while. My guess would be that the difficulty in replicating AGI would be the volume of data, the amount of training required and the model.

I now think that a good trigger for splitting off a separate Tesla-AI would be 10,000 working and profitable Robotaxis. Doing it at that time would ensure that instead of owning one valuable Tesla share, investors would own one valuable Tesla share, and one valuable Tesla-AI share.

Overall I am glad this issue has come up because IMO not being paid might be contributing to Elon being less focused and more distracted, it might be
slowing down progress or having Elon a bit half-hearted about developing AGI.

 

[mongo]

Those options won't become shares until 2028.

They become shares when he wants them too, but must do so by January 2028.

If they do won't the full value of the shares be taxed immediately then?

Yeah

Are there other reasons than the tax cost that Tesla (and I assume most other companies) always gives options and not shares?

The non-tax cost the business records is different.

 

[Drax7]

It makes no sense to move DOJO to a separate company from FSD. That's like taking the public school your children attend and selling it to the coal mines: Won't end well for the kids.

We, the shareholders, ALREADY PAID for Dojo, and it's upside potential. I don't even think Elon is talking about that, more likely future AGI. As for the Teslabot, that's ours too. And Elon's at his current ownership of TSLA.

For example, Elon wanted to build the Model Y on it's own own platform, but the BoD convinced him to bring it to market sooner by sharing the Model 3 platform. Elon needed advice.

Another example is FSD/Robotaxi, he wanted to build Robotaxi first, but the other leadership convinced him they could build both Model 2 and Robotaxi on the same line (now under construction at Austin). Elon needs the people around him to keep his feet on the ground.

What this comes down to is control of the future of AGI/Robotics. Elon can't assure that with 25% either, and frankly he's made some bad calls in the past which the Board has often corrected. That's proper, and expected of the Board. I don't see him needing more influence.

So, in conclusion, no more dilution, and please, do tell us how he's going to sell ~ %5 of pre-2018 shares w/o tanking the SP. The rest is a distraction, and giving him 10% more stock options just exasperates the underlying flaw both in the 2012/2018 CEO comp. plans: how to exercise the stock options w/o selling into the market and crashing the SP.

Agree, and moreover the falcon wing doors were totally unnecessary.
Elon’s exuberance may lead to hallucinations .

 

[Buckminster]

https://twitter.com/x/status/1748214480008618319

 

[Buckminster]

https://twitter.com/x/status/1748238521997865154

 

[UkNorthampton]

https://twitter.com/x/status/1748238521997865154

Ross Gerber did some good by sounding the alarm when he tried to pick up institutional votes. Luckily no-one more effective did this & awareness makes someone else less likely to succeed.

 

[FielderJones]

With Elon executing all his options at a 50% tax rate, it would require a 25% buyback or around $150 billion based on this morning's stock price to get him to 25%

Is there some special tax on options that's not mentioned here? I see 37% as the top marginal tax rate.

 

[mongo]

Is there some special tax on options that's not mentioned here? I see 37% as the top marginal tax rate.

Execution price (minimal), federal, California (13.3% prorated), net investment income tax (3.8%), FICA (6.2% for Elon, 6.2% for Tesla), plus bonus Medicaid (0.9%).

 

[EVNow]

Even if the free world agrees to AI restrictions, nut job dictators and 3rd world countries alike will have free reign.

Casual racism.