It may be noted that Tesla on Monday granted 96 million new shares worth about $29 billion to CEO Elon Musk, a move aimed at keeping the billionaire entrepreneur at the helm as he fights a court ruling that voided his original pay deal for being unfair to shareholders.
Elon Musk, the CEO of Tesla, expressed concerns about potentially losing control of the electric vehicle giant due to the influence of activist shareholders.
Why Elon Musk is worried about Tesla control
“It is worrying in that I don’t want to build millions of robots and then potentially be ousted by activists and unable to ensure that public safety remains of paramount importance,” he wrote on the X platform.
Musk, who currently owns a 12.8 per cent stake in Tesla, is apprehensive about being dethroned by shareholders who may not align with his vision for the company’s future.
He suggests that a 25 per cent ownership stake would offer him adequate influence, while still leaving room for his possible removal.
Musk’s fears are rooted in past instances where shareholders voted in favour of a compensation package tied to the company’s growth targets, only to be overruled by Delaware Chancery Court Judge Kathaleen McCormick.
Earlier in January, in a post on X, he shared that about 25 per cent ownership stake would be enough “to be influential, but not so much that I can’t be overturned.”
Musk has the opportunity to acquire an additional 304 million shares, which would boost his voting control by roughly 4 per cent post-tax.
There are rumours that Musk may resign if his ownership stake is curtailed, akin to the limitations imposed on his pay package.
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