Yahoo Tesla Poll

Should Tesla shareholders reapprove CEO Elon Musk’s pay package proposal?

The Captain

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That is a pretty ugly poll result (even though it isn’t scientific or in anyway representative of actual shareholders).

In 2018, the pay package was approved with 73% of the vote. If this poll was actually scientific and representative, that would reflect a fairly significant drop in support.

Perhaps not surprisingly, the results of your poll track pretty closely to his personal approval rating (from last year):

In May of last year, he had a 53-37% approval rating per YouGov.

Any insight on how soon we will know the results?


Results are expect sometime around June 13th, the date of the annual meeting.

Musk said 90% retail shareholders approve of his pay package. It’s much lower among institutional shareholders who make up more than half of the float.


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Not sure how he can claim that with the voting still happening. Maybe that is the current results of votes received (but then why would/should he have access to the real-time data of current votes - that would certainly seem to be in conflict if factual).

At the Annual Meeting

Thursday, June 13, 2024 | 3:30 PM CT

The Captain

Easy. He does what TFG did which is try to claim victory ahead of time so that he can claim it was rigged and stolen when the tally was finished.


If I was voting in a Yahoo poll I’d probably say “screw him.” If I was a retail shareholder I’d likely vote to withhold, knowing that the institutional shareholders will likely vote to give him the money.

I don’t know how you can make a deal and then take it back some years later (yet I still support the judge who decided it was unfairly announced). But it’s gargantuan, some of it was already a chip shot, given how low the initial hurdles were, the board is terribly, terribly compromised and not at all independent, and the dilution will be meaningful, and yet…

What company in its right mind gives more than half of all profit a corporation has ever made to one single individual, in a company with almost 200,000 employees? Sad, tragic, but probably inevitable. Terrible day for corporate America, worse for the working person. All of them, not just those at Tesla.


Approximately 40.21% of the company’s stock is owned by Institutional Investors, 13.66% is owned by Insiders and 46.13% is owned by Public Companies and Individual Investors. The ownership structure of Tesla (TSLA) stock is a mix of institutional, retail and individual investors.

This is a jive move by Musk. He is going to do a rug pull either way. He is going with X for the internet feed.

Who cares about a car company?

BTW eyeballing the shares owned, if Musk gets his way he controls going to X for the internet feed. If Musk fails to get his way Tesla builds its own internet feed. Musk is asking for the rope to hang Tesla.

Musk currently has a nearly 13% stake in Tesla. Prior to selling TSLA shares to purchase Twitter, now X, for $44 billion in late 2022, Musk owned around 22% of Tesla.

I have noticed, in the proxy statements I receive, that almost all companies have several honchos from “investment management” companies on their Boards. Would not be surprised that the “investment management” companies have Board seats to advance their interests, regardless what we Proles say with our votes.


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The Poll Flips

Of course there is no telling how many votes are by shareholders or how many shares they control. In my opinion it’s a vote about American society’s view of Capitalism at work. Agree?

The Captain

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Nah, I think it is really about people’s opinion about Musk - and of course a lot of non-shareholders likely voted in that poll and non-shareholders are likely to be more anti-Musk.


I wouldn’t put it like that, but the “yes” votes are fundamentally opposed to functional capitalism and the no votes are in favor of capitalism at work.


I’m having a hard time with your reply. What is ‘functional capitalism?’ In theory investing is a long term proposition but capital markets tend to be very short term, as in, “What did he just say?”

Ignoring the morality of the pay package as well as the morality of denying it, my take is that the Yeas want Elon Musk on board because he makes things happen while the Nays want the instant gratification of no dilution. Is this what you mean?

This is the quirky part of Complex Systems. The Joint Stock laws enabled a large number of people to invest but the fact that it is easy to sell your shares makes the outlook different from a “real” investor who is in it for the long haul. In other words, Joint Stock laws grew capitalism but at the cost of changing its functionality.

The Captain

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To greatly paraphrase Charlie Munger, just because you can money killing someone with an axe, it doesn’t mean it is a good thing to do. Functional capitalism is where capital is put at risk, a company creates value, and this creates jobs and returns capital to the stake holders. That’s the way it is supposed to work. Dysfunctional capitalism is where instead of creating value, value is removed from the company to enrich a few key players.

We’ve discussed examples of dysfunctional capitalism many times on this board. A common example is private equity using leverage to buy out a firm, load it up with debt and fees, extract the capital, and leave the company a lifeless husk. Examples are Toys R Us, Sears, Gymboree, Payless, etc. A similar type of dysfunction capitalism is Jack Welch-style management where value is extracted from company, but by insiders, instead of outsiders. Examples include GE and Boeing. A few insiders got enormously rich, but left the companies a pale shadow of their former selves. It is still capitalism, just not a good form.

In this case, Musk’s proposed pay package is the greater than the sum of all the money Tesla has made in its entire existence. There is no way a payday greater than the total earnings of the company is functional capitalism. That possible if and only if the company continues to grow at an exponential rate. That’s not the case currently. Revenue, sales, and deliveries are down and margins are getting squeezed. They just laid off 15% of their workforce.

Not very long ago, Tesla had most of the EV market to itself. It had amazing margins (for a car company) and couldn’t build cars fast enough to meet demand. But that’s also not the case anymore. The product they really need is the Model 2, and that’s a big question mark. The Robotaxi sounds great, but I’ll eat a bug if its ready in the next couple years.

The stated reasoning of both this vote and the previous one is that Musk needs huge amounts of money in order to him focused on Tesla. Sounds good, but he hasn’t been focused on Tesla. In fact, when he bought Twitter he transferred 50 engineers from Tesla to work at Twitter. That’s objectively bad for Tesla. Good for Elon, but bad for Tesla.

And compare with other tech founders, like Gates, Balmer, Bezo, Brin, and Page who never got any stock grants after their initial stake (as far as I know but I’m pretty sure that is true for all of them) , and only took modest salaries, instead preferring to grow their wealth by increasing the value of the company. Musk working on Twitter doesn’t seem like a good way to grow his stake in Tesla. If founders of other company–who were much, much more successful than Tesla–can do it, why can’t Elon? His actions suggest he doesn’t really care about Tesla at this point, he just wants to extract money out of the company. It is a quick bong hit of greed, instead of creating value for the stakeholders.


Here’s an interesting take. Musk has gone from meaningful capitalist, building companies and moving humanity forward to carnival barker pumping the stock price for his own benefit. Dysfunctional capitalism writ large.

Gift article:


You left out the part that no one has paid Musk for all the work he did on Tesla. That seems relevant.

Way back when Musk made an all-or-nothing bet with the board and investors. Musk said if I make all of you a ton of money, I get paid a ton of money. If I don’t make you a ton of money, I don’t get paid.

Seems like a win-win for the investor. That’s why 70% of us voted for the package. In what way is that dysfunctional?

What is dysfunctional is to have an economic agreement that most of those involved were happy with and then have it revoke 5 years later by an outside party.


Ya, that’s not factual. He was going to get about $3 billion just for getting out of bed.

Seems like a win-win for the investor. That’s why 70% of us voted for the package. In what way is that dysfunctional?

In the way that us stockholders need not necessarily pay him $40 billion more than necessary. Every share he gets that is unnecessary creates dilution.


Talking about Musk, the board is focused on Tesla, but space cadet that I am I pay attention to Space X.

Musk puts Werner von Braun, and even my Dad (!), in the shadows. Space X is absolutely amazing and mind boggling. Visionary, brilliantly and inspiringly led, transformative.

Now, I do think he is nuts…

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Okay, let’s say he should be paid the same comp package as Sergy Brin or Larry Page. Which is very generous because they created much, much, much, more value for stakeholders than Musk.

That means Tesla would owe Musk $6 dollars.


Thank you for explaining ‘functional capitalism,’ the way business used to work.

  • Create a product or service
  • Sell it at a profit
  • Rinse and repeat

The limiting factor was capital, an issue resolved with the creation of Joint Stock legislation by allowing everyone to contribute capital. This allowed the creation of giant ventures like the East India Companies. At the same time it added complexity, the outside shareholder did not have the same motivation as the individual business owners of yore. The shareholder’s profits could come as much from the business itself in the form of dividends as from the stock market via capital appreciation.

A few centuries later (1973?) three brilliant mathematicians, Black, Scholes, and Merton, figured out how to price stock options allowing the creation of a vibrant new standardised options market.

As the economy and business were booming so was executive pay to the point that it was deemed excessive. The government stepped in to fix the problem. Executive pay would no longer be tax deductible beyond a reasonable limit, say a million dollars. Business looked for alternatives and came up with stock based compensation.

Few people know the accounting principles involved in stock options which are at the core of the issue. A shareholder’s accounts are separate from corporate accounts. The shareholder, unlike the partner, has no corporate liability beyond paying up for his subscribed shares, a condition clearly stated in the Joint Stock laws.

Stock based compensation turned out to be very effective. Please read Option Math (June 11, 2002 ) before continuing

o o o o o o o o o o o o o o o o o o o o
Aside: When I set up my company in Silicon Valley in 1985 I put up the capital and gave my two partners one third of the shares each on the condition that none of us would be paid except out of revenue. Why? Better 1/3 of something than ALL of nothing.
o o o o o o o o o o o o o o o o o o o o

Some people were very much against stock options. The problem for Warren Buffett was stock dilution which was contrary to his investing philosophy. The opposition managed to screw up GAAP accounting by conflating shareholder accounting with corporate accounting by expensing stock options to make them look less attractive. While this may seem to be fair it is Accounting Malpractice!

Can there be crime without victims

Elon Musk’s pay package was approved in 2018. I was not a shareholder at the time. Ron Barron was. He approved the deal and is now convinced that it was a very profitable deal for him.

While this statement is true it suffers the same conflation problem that option expensing has. The money does NOT come from Tesla, it comes from the stock market. Tesla customers do NOT pay Elon Musk, the stock market does (or would have). Ron Barron did not get dividends, he got capital gains created by new investors who liked what Tesla was achieving.

While there is much focus on margins and profits, to stay solvent the focus must be on cash flow. You can’t go broke while you can pay your bills. Elon Musk did not draw down Tesla’s cash flow with the pay package, quite the contrary, he did not draw a penny in salary or bonuses as most CEOs would.

Another example of Musk protecting the cash flow to let Tesla stay solvent and alive!

I started investing in Tesla in October 2020. While I was not aware of the 2018 pay package I gave it tacit consent by buying Tesla shares. I had been interested in the EV market since 2010. What convinced me to invest in Tesla was that, in my opinion, the EV technology had Crossed the Chasm and Tesla was the undisputed leader in the EV market.

Question, would it be fair from me, after having given tacit consent to the pay package, to ask a judge in Delaware to annul it?

The suit is nothing but an Ambulance Chasing Lawyerly $6 billion Scam. The 9 share holder also gave tacit consent to the pay package the day he bought the nine shares. No Tesla customer has been harmed. No Tesla investor has been harmed.

Follow the source of the money to get to the relevant facts, investors happy to bid up $TSLA shares.

Can a genius not be a nut in the eyes of ordinary people :interrobang:

The Captain