Elon Musk Calls Proxy Advisor Firms Corporate Terrorists

Elon Musk recently urged Tesla’s shareholders to approve a massive compensation package worth $1 trillion to ensure he maintains sufficient control over Tesla’s future development of Artificial Intelligence (AI) and robotics, which he referred to as a "robot army."

The compensation deal under discussion is monumental, designed to give Musk stock options only if the company reaches extremely ambitious performance targets. While the full, maximum potential value of the plan is often cited as $1 trillion, the core purpose, according to Musk, is to increase his voting power in the company.

Musk currently holds about 13% of Tesla's stock. He is asking shareholders to approve a package that would increase his stake to the mid 20s range, ensuring he has a stronger influence over major company decisions. The package is contingent upon the company hitting several extraordinary milestones, which reportedly include driving Tesla’s market value up to $8.5 trillion and successfully delivering 1 million Optimus humanoid robots.

Musk insisted during a recent shareholder conference call that the compensation isn't about personal wealth, but about governance. As he put it: “It's just if we build this robot army do I have at least a strong influence over that robot army? Not control but a strong influence.”

His fear is that if he doesn't have a large enough stake, the board could remove him, leaving the potentially world-changing "robot army" vulnerable to corporate control he doesn't trust: “My fundamental concern with regard to how much money and control I have at Tesla is if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?” In this way, Musk is able to work more unilaterally and have greater weight in controlling the direction of the company. 

However, Musk's campaign for approval has been met with heavy opposition, particularly from powerful proxy advisory firms like Institutional Shareholder Services (ISS) and Glass Lewis. These firms advise large institutional investors on how to vote in shareholder meetings and have recommended they vote “no” on the package, citing its excessive size and the potential for dilution (reducing the value of existing shareholder stock).

Musk lashed out at these critics, using remarkably strong language to dismiss their influence and opinions: “I just don't feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass Lewis who have no friggin' clue. I mean, those guys are corporate terrorists.”