{"id":33134,"date":"2025-07-24T06:59:07","date_gmt":"2025-07-24T06:59:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/33134\/"},"modified":"2025-07-24T06:59:07","modified_gmt":"2025-07-24T06:59:07","slug":"elon-musk-wants-more-control-of-tesla-so-activist-investors-cant-boot-him-but-not-so-much-the-board-cant-fire-him-if-he-goes-crazy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/33134\/","title":{"rendered":"Elon Musk wants more control of Tesla so activist investors can\u2019t boot him\u2014but not so much the board can\u2019t fire him if he goes \u2018crazy\u2019"},"content":{"rendered":"

Tesla CEO Elon Musk just confessed that he thinks his 13% ownership stake in the electric vehicle manufacturer leaves him vulnerable to activist shareholders who could move to oust him from the $1 trillion company. Still, he admitted he shouldn\u2019t have so much control over Tesla that the board can\u2019t fire him if he goes \u201ccrazy,\u201d he said during an earnings call<\/a> on Wednesday.\u00a0<\/p>\n

\u201cIt is a big deal\u2014I don\u2019t want to find I have so little control I can be easily ousted by activist shareholders,\u201d Musk said. \u201cThat is a major concern to me as I\u2019ve mentioned in the past and I hope that is addressed at the upcoming shareholders meeting.\u201d<\/p>\n

I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can\u2019t be overturned.<\/p>\n

Unless that is the case, I would prefer to build products outside of Tesla. You don\u2019t seem to understand\u2026\u2014 Elon Musk (@elonmusk) January 15, 2024<\/a><\/p>\n

Musk owns 13% of Tesla, a stake currently valued around $139 billion. He has previously stated he wants to own 25% of the electric vehicle manufacturer as it further expands into AI with unassisted Full Self Driving and robotics. Such a stake would be worth about $267.5 billion and would eclipse holdings by large institutional investors in Tesla such as Vanguard<\/a> and Blackrock. Musk has worried in the past about the influence of activist investors or proxy advisory firms steering Tesla down the wrong long-term path at the expense of short-term pressures.\u00a0<\/p>\n

However, Tesla currently maintains a defensive position against activists. Its bylaws call for what is termed a supermajority vote requirement, meaning shareholder votes must achieve support from two thirds of all outstanding shares (66.67%) rather than a simple 50% majority in order to pass. The board committed<\/a> last year to Tesla shareholders that it would eliminate the supermajority vote requirement, but it hasn\u2019t been able to muster enough investor participation.\u00a0<\/p>\n

Tesla amended its bylaws in 2023 to provide shareholders with proxy access rights, meaning a shareholder or group of shareholders owning 3% or more of Tesla for at least three years can nominate directors to Tesla\u2019s board. A stake that size would be valued at more than $20 billion. Securities and Exchange Commission rules<\/a> require activist investors to disclose their stakes in company stock once they reach 5%, which is also the point where an activist can typically gain credibility with the board. A 5% stake in Tesla is worth more than $30 billion. In comparison, legendary activist investor Nelson Peltz took on<\/a> the Walt Disney<\/a> board after building a stake valued at about $3.5 billion at its peak<\/a>. Activist investors often typically target small-cap publicly traded companies<\/a>.\u00a0<\/p>\n

Tesla did not immediately respond to a request for comment.\u00a0<\/p>\n

Musk shared his view on his ownership stake in response to an analyst\u2019s question about how comfortable the CEO was in evolving Tesla in new directions with only the 13% stake. Musk pointed the annual shareholder meeting, which will be held<\/a> November 6, as a potential issue to get aired out then.\u00a0<\/p>\n

\u201cI think that, as I\u2019ve mentioned before, I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can\u2019t be thrown out if I go crazy,\u201d he said.\u00a0<\/p>\n

Musk has been working without a base salary or annual bonus for years, after the Tesla board granted him a moonshot pay package once valued as high as $56 billion\u2014the highest for a publicly traded CEO. However, that pay package was twice rescinded by a judge and Tesla has announced it formed a board committee to hash out next steps. With the delay in Tesla\u2019s annual shareholder meeting, the company has not yet published a proxy report to shareholders, which typically includes executive compensation disclosures.\u00a0<\/p>\n

Tesla reported<\/a> mixed results in its second quarter financials<\/a> on Wednesday. Revenue declined<\/a> 12% year-over-year to $22.5 billion, its worst revenue performance <\/a>in the past decade. Operating income dropped 42% year-over-year to under $1 billion, although Tesla was still profitable with $1.2 billion in GAAP net income. Meanwhile, free cash flow cratered 89% year-over-year to $146 million, compared to $1.3 billion during the same quarter last year.\u00a0<\/p>\n

Deliveries were down 13% to 384,122, although there were some major developments noted.\u00a0<\/p>\n

Tesla launched its much-ballyhooed Robotaxi pilot in Austin, and it boosted its AI training capacity. Separately, Tesla opened<\/a> a new diner and drive-in theater at a mega charging station in Hollywood this week.\u00a0<\/p>\n

Tesla executives did not address speculation about a Tesla investment in Musk\u2019s xAI, nor did they address questions from retail investors about Musk\u2019s involvement in politics and its impact on Tesla\u2019s value. <\/p>\n

Retail investors post questions on an open platform<\/a> for Tesla shareholders called Say in advance of the earnings releases. Many related to Musk had to do with his compensation and the board\u2019s plan to oversee Musk\u2019s future political moves.\u00a0<\/p>\n

\u201cElon the person has freedom of speech,\u201d wrote one shareholder representing 47,000 shares. \u201cThe brand ambassador of Tesla does not. What is the board doing to distance Tesla from the private actions of its CEO?\u201d\n<\/p>\n