Elon Musk, Tesla's chief executive, gave a personal tour of the electric carmaker's factory in Austin, Texas this week to select shareholders.
“Please let us know if you have any questions about voting your Tesla shares!” Musk wrote on X, the social media platform he owns.
It was just one of at least a dozen posts Musk has made about X in recent weeks, as Tesla shareholders voted him a $46.5 billion pay package.
To encourage approval of the package, Musk shared sizzling footage of Tesla vehicles hurtling across deserts at dusk on X. He said he needs enough shares in the company to maintain control, especially as he ramps up his artificial intelligence efforts. And he lashed out at investors who have said they will oppose paying him.
“Thank you to all Vote Tesla supporters!” Mr. Musk wrote in a post on May 16, followed two days later with: “Shareholders have the right to vote their shares!” He said on Thursday that shareholders who voted against him were “violent.”
The messages on X highlight how crucial the pay package is for Musk after a Delaware judge struck it down in January. The judge ruled in favor of a dissident shareholder who had sued Tesla, arguing that Musk's compensation was excessive.
Now Tesla is waging a campaign to convince shareholders to reapprove Musk's pay, which helped turn the company into the world's most valuable automaker. Tesla has also posted on his behalf, and the company's board has publicly supported Musk's campaign, saying his performance deserves the compensation.
Mr Musk turned to his favorite platform, X, to make his case. It's part of his pattern of increasingly using X to benefit his other companies. In some cases, he provided support to right-wing state leaders, who later helped secure benefits for Tesla, including lower tariffs and access to important materials. He also uses the site to publicize milestones at SpaceX, his rocket company, and the introduction of new vehicles at Tesla to his 185 million followers.
Musk's use of X is “a boon and a curse at the same time,” said Eric Talley, a professor at Columbia Law School. “X is a good way to rally the troops.” But, he added, “you want to have an attorney who's going to make sure he's not ruining his case.”
Musk's X-rated posts about his Tesla pay package most likely don't run afoul of the law as long as he doesn't mislead shareholders, corporate governance experts said. But threats like one he posted in January to pursue robotics and artificial intelligence ventures outside of Tesla unless he gets 25% of the company's voting shares could be problematic, they added.
In response to a request for comment, a representative of Tesla's board of directors referenced a post in which Musk said he didn't need money but wanted enough oversight to ensure the AI was handled responsibly . Mr Musk did not respond to a request for comment and X declined to comment.
Tesla board chairwoman Robyn Denholm published a post on a company-backed website arguing for her compensation package. “Elon has provided the kind of growth that many thought was impossible and has created tremendous value for you, the owners of the company,” he wrote.
Tesla shareholders first voted on Musk's compensation package in 2018, approving a plan to grant him an additional 12% stake in the company over a dozen years and making him the highest-paid executive in the country. Tesla was valued at $560.2 billion as of Thursday's market close and Musk controls 20.5% of it, according to Securities and Exchange Commission filings. (This figure includes shares that were voided by the Delaware court and that Tesla is trying to reinstate. Without those, its stake is about 13%.)
Mr Musk does not receive any salary from Tesla. To earn the company's stock payments, he had to complete ambitious company growth milestones.
But Kathaleen McCormick, a Delaware Chancery Court judge overseeing the dissenting shareholders' lawsuit, struck down the compensation package, ruling that Musk had near-total influence over Tesla's board and essentially approved his own compensation without adequate management fiduciary. The judge also ordered him to repay the excess pay to Tesla.
In April, Tesla asked shareholders to reapprove Musk's compensation package. The result will be announced at the company's annual meeting on June 13.
Mr. Musk frequently posts about Tesla on X, in part because the automaker eschews more traditional marketing. It usually hosts high-impact online events to debut the company's humanoid vehicles or robots.
Some of his posts about Tesla on X have gotten him into trouble. In 2018, the SEC fined Musk $20 million for saying on the platform, then known as Twitter, that he planned to take Tesla private at $420 a share. (Tesla paid a separate $20 million fine.) That price, for which he said he had “secured financing,” was 20% higher than what Tesla shares were trading at at the time. Regulators later said he had misled investors.
As part of his settlement with the SEC in 2018 for the post, Musk was required to release his social media posts by a company lawyer if the statements contained material information about Tesla. He also resigned as chairman of Tesla's board of directors.
Mr. Musk later tried to walk out of the deal, saying it violated his freedom of speech. But in 2022 a federal court rejected the request. Mr Musk appealed to the Supreme Court, which declined to hear the case in April.
The SEC declined to comment on Musk's public campaign for his pay.
It is unclear whether the compensation package will be approved. Some institutional investment firms, such as Nordea Asset Management, have spoken out against the compensation package in recent weeks. Tesla shares are down about 28% this year, and the company is behind schedule for releasing new models. Tesla has also lost customers to electric car makers in China.
“While Tesla's performance is struggling, the board must still ensure that Tesla has a full-time CEO who is adequately focused on the long-term sustainable success of our company,” a group of institutional investors wrote to shareholders this month . Among the investor representatives was New York City Comptroller Brad Lander, who oversees the city's pension fund.
Glass Lewis, a consultancy that advises institutional investors on how to vote their shares, recommended this week that Tesla shareholders reject Musk's package. The company said his already sizable ownership in Tesla gave him an incentive to perform well and that granting him more shares would dilute the ownership of other shareholders.
Glass Lewis' views impact large asset managers, which in Tesla's case include Vanguard and BlackRock. CalPERS, California's pension fund, also said it would vote against the compensation package.
“Shame on them, they have no honor,” Musk wrote in response Wednesday.
The pay measure's chances of passing took another blow Friday when Institutional Shareholder Services, which also advises institutional investors, spoke out against approval.
Even if Tesla shareholders vote to reinstate Musk's pay, they are unlikely to have the final say, legal experts said. The Delaware judge will still have to decide whether the vote will be enough to reinstate his salary, and the ruling will likely be appealed.
To survive legal challenges, the compensation package needs approval from investors representing more than 50% of voting shares not belonging to Mr. Musk or his brother, Kimbal Musk.
Paul Regan, an associate professor at Widener University Delaware Law School, said of Tesla's board of directors: “This thing may end up not going the way they think.”