Elon Musk Defends $1 Trillion Tesla Pay Package and Criticizes Advisory Firms During Earnings Call

Tesla's recent earnings call took an unexpected direction when CEO Elon Musk directly appealed to investors to support his proposed $1 trillion compensation package. This appeal emerged during what was otherwise a technical discussion focused on Tesla's advancements in artificial intelligence, humanoid robotics, and autonomous driving technology.

Musk, currently the world's wealthiest individual, defended the unprecedented compensation proposal as essential for safeguarding Tesla's future. During the investor call, he emphasized his need for adequate voting control to maintain meaningful influence over the company's direction.

"It's not like I'm going to go spend the money. There needs to be enough voting control to give (me) a strong influence - but not so much that I can't be fired if I go insane," Musk stated, interrupting Chief Financial Officer Vaibhav Taneja as the extended call was concluding.

This appeal followed Tesla's disappointing financial results, which revealed a 40% decline in operating income for the third quarter. Despite achieving record vehicle deliveries, the company's profits fell short of expectations due to escalating costs and shifting US policy environments. Tesla reported operating expenses increased by 50% to $3.4 billion, while tariffs imposed a burden exceeding $400 million on the quarter's performance.

Bloomberg reported that advisory firms Institutional Shareholder Services and Glass Lewis have recommended investors reject Musk's extraordinary compensation package, which is contingent upon Tesla reaching specific market valuation benchmarks and operational targets. ISS expressed "unmitigated concerns" regarding the scale and structure of the award, while Glass Lewis questioned its potential dilutive impact on other shareholders' equity positions.

Musk candidly criticized these advisory organizations, describing their recommendations as "asinine" and stating they had "no freaking clue" about Tesla's operations.

"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 freaking clue," he elaborated.

"They have made many terrible recommendations in the past that if those recommendations had been followed, it would have been extremely destructive to the future of the company," Musk was quoted saying by CNN.

CFO Taneja later commended the special board committee for their work structuring the compensation arrangement, clarifying that no benefits would be realized until shareholders see substantial returns. "There's nothing that gets passed on until the time shareholders make substantial returns," Taneja explained while encouraging shareholder support.

Tesla shareholders will vote on Musk's $1 trillion compensation package during the company's annual meeting scheduled for November 6.

With a current net worth approximately $455 billion, Musk maintains his position as number one on the Bloomberg Billionaires Index.