Elon Musk has branded opponents of his proposed $1trillion (£750billion) Tesla pay package ‘corporate terrorists’.
The billionaire tycoon – the world’s richest man with a fortune of £340billion – said advisers Glass Lewis and ISS had ‘no freaking clue’ after they urged shareholders to vote against the deal.
The electric car giant’s board has warned that failure to approve the biggest payday in corporate history could lead to Mr Musk walking away from the firm.
The proposed deal, which is set to be voted on by shareholders on November 6, would see Mr Musk awarded $1trillion over the course of a decade if he hits all his targets.
Tesla boss Elon Musk could become the world’s first trillionaire
These include turning Tesla from a £750billion company into a £6trillion business over ten years while selling 12 million vehicles, one million artificial intelligence robots and one million self-driving robotaxis.
The pay package would see Mr Musk increase his stake from 13 per cent today to nearly 29 per cent and make him the world’s first trillionaire.
The tycoon stressed the increase in his voting power at the company – not the value of the share awards that come with it – was the driving force behind the deal.
‘I just think that there needs to be enough voting control to give a strong influence, but not so much that I can’t be fired if I go insane,’ he said.
‘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.’
Glass Lewis this week said the deal should ‘warrant significant concern’ given the size of the potential share awards.
It also said it could hand the Tesla boss ‘extraordinary pay levels without commensurately exceptional performance’.
It is not the first time Mr Musk’s pay has caused controversy.
Last year, a judge struck down a previous deal that would have handed him £42billion.
But Tesla chairman Robyn Denholm last month said: ‘Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history.’
The latest pay row came as Tesla reported record quarterly revenues of £21billion amid booming demand for its electric vehicles.
But profits fell 37 per cent to £1billion as the company was hit by tariffs on car parts entering the US, rising costs and dwindling green subsidies.
The latest round of results marked the firm’s fourth consecutive quarterly profit drop.
Tesla is grappling with tariffs imposed by the Trump administration on auto-parts imports, which chief financial officer Vaibhav Taneja said cost Tesla more than £300million in the quarter.
Tesla is recalling 63,619 Cybertruck vehicles in the US as parking lights that are too bright can reduce visibility of oncoming drivers, increasing the risk of a crash, the US National Highway Traffic Safety Administration said on Thursday.
Quarterly results: Tesla said third-quarter earnings fell 37% to $1.4bn
Automotive regulatory credits, once a key driver of profit, fell to £312million in the quarter, down from £554million a year ago.
Tesla reported a gross margin of 18 per cent, compared with estimates of 17.5 per cent. Its closely watched automotive gross margin, excluding regulatory credits, was 15.4 per cent, against forecasts of around 15.6 per cent.
Tesla’s valuation largely reflects investor bets on Mr Musk’s pivot to robotics and artificial intelligence (AI), but vehicle sales remain key to the financial stability of the business while those products are being developed.
Demand for Tesla’s vehicles and those of its rivals is expected to drop during the rest of the year without the tax credits that have been a key driver of EV sales.
Tesla reported a 50 per cent increase in operating expenses driven by AI and other research and development projects, an increase in stock-based compensation, and on an earnings conference call, Taneja said capital expenditures would rise substantially next year.
To combat a demand drop, Tesla introduced lower-cost ‘Standard’ variants of Model Y and Model 3 vehicles earlier this month, cutting out a string of premium and basic features and lowering prices by about $5,000 to $5,500.
While Tesla hopes the cheaper variants will drive higher volumes, analysts warn the move will squeeze margins as thousands of dollars of cost cuts per vehicle may not fully compensate for lower selling prices.
Tesla said it was on track to start volume production of its Cybercab robotaxi, Semi truck and Megapack 3 battery next year.
The firm’s energy business saw an 81 per cent increase in storage deployment in the quarter, and its robot plans are advancing, with production of humanoid bot Optimus hopefully starting toward the end of 2026, Musk said.
Tesla did not provide a full-year forecast for production, but Musk said Tesla could expand production, given his confidence in self-driving software.
When asked whether increasing production would require offering incentives and squeezing profit margins, Musk forecast ‘nutty’ demand for the self-driving Cybercab and said margins would not be sacrificed.
Wall Street expects Tesla’s deliveries in 2025 to slip 8.5 per cent due to the expiry of the tax credit, reliance on older models and rising competition.
But many investors are confident in Musk. Nancy Tengler, chief executive and chief investment officer of Tesla shareholder Laffer Tengler Investments, said she was bullish on the next three to five years.
She said: ‘I’m less concerned about the next quarter. It’s messy, it’s hard, it’s trial-and-error, it’s try again. But this is a CEO who is determined. And I think what we’ve seen historically is that he will get it done’.
Dan Coatsworth, head of markets at AJ Bell, said: ‘Elon Musk has outspoken views on many things, but he didn’t have much to say on the fact Tesla’s Q3 results missed earnings expectations for the fourth quarter in a row.
‘Instead, the analyst conference call was the usual big picture stuff, talking about the world of tomorrow and Tesla’s role within it.
‘Sales were propped up by a rush to buy electric vehicles before a US tax credit disappeared. However, profits disappointed amid increased costs, including spending on AI as it focuses more on robotics.’
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