Ahead of a shareholder vote on restoring the tech entrepreneur's $50 billion stock award, Musk faces strident resistance from previously reliable sources who now question his commitment to the electric vehicle company.
Read the full story on Forbes: https://www.forbes.com/sites/alanohnsman/2024/06/11/elon-doesnt-care-about-tesla-anymore-musks-biggest-fans-are-turning-on-him/
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Read the full story on Forbes: https://www.forbes.com/sites/alanohnsman/2024/06/11/elon-doesnt-care-about-tesla-anymore-musks-biggest-fans-are-turning-on-him/
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LifestyleTranscript
00:00Today on Forbes, Elon Musk's biggest fans are turning on him.
00:07For years, Elon Musk had no greater fan than Tesla investor Ross Gerber.
00:12When Musk mocked the SEC on Twitter a few years ago, Gerber asked Musk to vent to him
00:17privately because, quote, you're just helping the enemy.
00:21When Tesla's board asked shareholders in 2018 to award Musk with stock potentially
00:26worth tens of billions of dollars, Gerber backed it because, quote, true shareholders
00:32are all in on Elon.
00:35But after a year in which Musk has made increasingly controversial comments and fixated on newer
00:40endeavors like X, formerly known as Twitter, and his artificial intelligence startup, XAI,
00:46Gerber has had enough.
00:48The CEO of Los Angeles-based wealth manager Gerber Kawasaki has suddenly become a strident
00:54and outspoken critic of the entrepreneur he's long admired.
00:57And with a looming shareholder vote to restore a pay package for Tesla's CEO worth around
01:03$50 billion, he'll be voting no, the first time he's so publicly opposed one of the Tesla
01:09board's recommendations.
01:11Gerber told Forbes, quote, when I voted for the package in 2018, that was based off information
01:17I had at the time and the fact that Elon worked at Tesla full time.
01:21Now my reluctance to vote for it has to do with new factors, the most important being
01:25that he doesn't work at Tesla anymore.
01:27He works for XAI and he works for X.
01:30Tesla is not his priority.
01:33Gerber isn't the only Tesla fan to have turned on Musk after years of devotion.
01:37Singapore-based Leo Koguan once described Musk as, quote, the only person I really respect
01:43on earth.
01:45And he claims to be Tesla's biggest retail shareholder.
01:48Koguan also voted against the board's proposal to restore stock awards Musk was stripped
01:53of by a Delaware judge in January.
01:56Koguan told Forbes, quote, I've discovered Tesla has one shareholder, a one-person board,
02:01and one tyrant CEO.
02:03The priority is he should work and do his job as CEO of Tesla.
02:08Musk has repeatedly pushed back on accusations he's not focused enough on Tesla, even as
02:12the number of other companies he's running has grown to include SpaceX, Boring Company,
02:17Neuralink, X, and XAI.
02:21In a recent earnings call, Musk said, quote, I work pretty much every day of the week.
02:25It's rare for me to take a Sunday afternoon off.
02:28I'm going to make sure Tesla is quite prosperous.
02:30It is prosperous, and it will be very much so in the future.
02:35More state institutional investors have also been spooked by Musk's antics and voted against
02:40the compensation proposal, including Norway's $1.7 trillion sovereign wealth fund, Amalgamated
02:46Bank, the California Public Employees Retirement System, New York City comptroller Brad Lander,
02:52and Nordea Asset Management, as well as advisory firms Institutional Shareholder Services and
02:58Glass Lewis.
03:00Along with the billionaire's pay, the annual shareholder meeting Thursday will also put
03:04to a vote Musk's plans to reincorporate Tesla in Texas from Delaware, where he'd move the
03:10company to avail himself of the state's lighter approach to business regulation.
03:14The meeting will also put to a vote new board terms for people close to him, his brother
03:18Kimball and James Murdoch.
03:22Musk and bullish equity analysts like Wedbush's Dan Ives and Morgan Stanley's Adam Jonas expect
03:27the compensation vote to come out in his favor based on shareholder surveys.
03:32Gerber isn't so sure.
03:34Musk, who owns 13 percent of the company, quote, can't vote his shares.
03:38So if you take that out, it comes down to the institutional shareholders who are being
03:42advised to vote against it.
03:44He added, quote, I'm kind of looking at the outcome as a coin flip right now.
03:50That the outcome isn't a foregone conclusion suggests something of a reckoning for Musk,
03:54who has fallen in public esteem from a widely praised serial entrepreneur and cleantech
03:59visionary to a pugnacious and erratic billionaire who seems unconcerned with offending current
04:04and potential Tesla customers, regulators and even presidents, seemingly spending more
04:09time on X posting to his 187 million followers than strategizing with engineers on new
04:14models and features.
04:16The result has been inflammatory tweets that are anti-Semitic, racist and anti-trans and
04:21high profile misfires like Tesla's bulky Cybertruck.
04:25None of that helps the company's brand as EV market competition grows more fierce.
04:31For full coverage, check out Alan Onsman's piece on Forbes.com.
04:37This is Kieran Meadows from Forbes.
04:39Thanks for tuning in.