Elon Musk, the wealthiest person globally, has expressed his desire for a more substantial ownership stake in Tesla, aiming for around 25% of the company’s stock.
Currently holding approximately 13%, Musk emphasized his discomfort with expanding Tesla’s role in artificial intelligence (AI) and robotics without a corresponding increase in his voting control.
Musk took to social media platform X to outline his vision, stating, “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’t be overturned.”
He hinted at a preference to explore projects outside of Tesla if this condition isn’t met.
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’t be overturned.
Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand…
— Elon Musk (@elonmusk) January 15, 2024
Notably, Musk had a stake exceeding 20% in Tesla before selling shares to fund the acquisition of X, a social media company he purchased for $44 billion over a year ago.
Despite Tesla’s current dominance in electric vehicles, Musk sees the future in AI and robotics, considering the development of a humanoid robot as a pivotal technology.
While the robot, Optimus, is still in its early stages, Musk believes in a future driven by robots.
Investors, hopeful for groundbreaking innovations from Musk and Tesla, have driven the company’s stock upward.
Any indication that Musk might shift his focus away from Tesla could cause concern among investors, leading to a 1.5% premarket decline in Tesla shares.
Addressing his compensation, Musk highlighted that he has been without a new pay plan for several years.
The $56 billion package announced in 2018 faced legal challenges, with a Delaware Chancery Court ruling pending on whether it was excessive.
Musk indicated that he and Tesla await this ruling before agreeing to a new compensation plan.
Musk’s concerns extend beyond compensation, emphasizing the need for increased ownership to wield influence within Tesla.
He fears that with his current level of ownership, influential asset managers like Fidelity and BlackRock could undermine his transformative vision for the company.
Musk outlined his reasoning: “If I have 25%, it means I am influential, but can be overridden if twice as many shareholders vote against me vs for me.”
While many tech companies adopt a dual-class voting system to maintain founder influence, Musk dismissed this idea for Tesla, attributing it to a “post-IPO Delaware” without providing further clarification.
Regulatory scrutiny on such ownership structures persists, although they are still permitted.