Musk, who received a sky-high salary of 400 billion, officially announced 3 new cars. Tesla cannot do without “Iron Man”

Please cast your valuable vote for Musk.

When I refreshed this content on my Weibo timeline, I thought Musk was going to announce his participation in the presidential campaign.

When I took a closer look, I discovered that it was Tao Lin, Tesla’s vice president of external affairs, who had forwarded an official Tesla Weibo post, aiming to canvass votes for Musk’s shareholder meeting proposal on sky-high compensation. At the same time, many executives, including Tesla Chairman Robyn Denholm, are also canvassing votes for Musk.

The reason is that Tesla's annual shareholder meeting Cybe Roundup was held at 4:30 a.m. on June 14, Beijing time, and all Tesla shareholders will vote on 12 proposals. Two of the high-profile proposals include another vote on Musk's compensation package and Tesla's proposal to move the company's registered office from Delaware to Texas.

▲ After announcing the approval of the long-term salary incentive plan, the audience stood up and started applauding

In the end, although some institutional investors still expressed opposition, the shareholders' meeting still passed Musk's long-term compensation incentive plan with a large advantage and supported Tesla's move of the company's registration place from Delaware to Texas. .

Wait, how much? $56 billion (nearly 400 billion yuan) in compensation?

Musk, who doesn’t want to be CEO: Who else would I lead Tesla?

Whether it is the ranking of the world's richest man or the annual salary announced by top corporate executives, it often becomes a topic of discussion after dinner. We can often see changes in the ranking of the world's richest people on Weibo's hot searches, and even the annual salary changes of Apple CEO Tim Cook are hotly discussed every year.

As the CEO of Tesla, the world's largest electric vehicle manufacturer, Musk's income does not come from a traditional fixed salary, but is completely linked to the company's market value and performance, which corresponds to a 10-year CEO performance reward plan. There is no fixed form of compensation included in the package – no salary, no cash bonuses, and no stock based on time.

The only thing in this performance incentive plan is a 10-year stock option, which is divided into 12 installments. Only Musk who leads Tesla through a "step" in market value can receive matching option incentives.

Rather than saying this is an incentive plan, it is better to say that this is a "piece of pie" that Tesla's board of directors presented to Musk.

When this plan was announced, Tesla's market value was US$59 billion, and the first-level "step" goal was US$100 billion. Even if Musk increases Tesla's performance by 80% in ten years, which is a good performance for any company, he still won't get any rewards. He can only fulfill this reward by doubling the market value. ; Only when Tesla's market value rises to US$650 billion can Musk receive all the performance rewards – 20.3 million Tesla stock options.

A company with a market value of US$650 billion, in 2018, was firmly among the top five giant companies in the world.

▲ Picture source: phb123

Considering that Tesla was already a company where almost everyone owned shares, all employees and shareholders expected Tesla to achieve such crazy growth, and they would benefit from it.

At that time, Ira Ehrenpreis, chairman of Tesla's compensation committee, said in an interview with the New York Times: "This is a game where you win on heads and you don't lose on tails." If Musk has received billions of dollars, then shareholders will also There will be a profit; if Musk cannot fulfill his duties, shareholders have no stake to pay. Therefore, this exaggerated plan was passed at the Tesla shareholders meeting in 2018 with 73% of the votes in favor.

In fact, Tesla in early 2018 was in a difficult moment of "life and death." Due to Model 3 production capacity not meeting expectations, a large number of orders could not be delivered as scheduled. Due to the drag on production capacity, Tesla, which was in "capacity hell" from Q3 of 2017 to Q2 of 2018, continued to set new single-quarter loss records.

To this end, Musk personally entered the factory and chose to sleep in the factory, working up to 120 hours a week. He spent all his energy and time optimizing the Model 3 production line, improving production efficiency, and getting out of production hell.

With the improvement of automation level, the production of Model 3 has been effectively increased, and after accelerating the fulfillment of orders, Tesla has also obtained relatively sufficient cash flow, thus submitting a positive annual report. When Musk posted a message to celebrate Model 3-week production exceeding 5,000 units, he seemed to vaguely hear the pitiful cries of short sellers. It was also at this time that Musk believed Tesla was just becoming a real car company.

Everyone should know the following story. Tesla's situation has become increasingly clear, and its stock price has soared since 2021, even reaching over 1 trillion US dollars. According to this performance reward plan, Musk wins the bet and will receive the highest salary return in the world.

But when it came time to actually cash out the compensation incentives, some investment institutions and shareholders were dissatisfied with Musk taking such a high salary, so they chose to have more discussions with Musk in court about the compensation plan confirmed four years ago. .

Some shareholders believe that Musk previously spent most of his energy on SpaceX and Twitter (now X), and also used Tesla's resources to help these companies, and used his control over the company and the board of directors to finalize this long-term compensation plan, so I hope this plan will be abolished.

Some institutional shareholders have also expressed concerns about the total size of the compensation package, performance trigger structure, equity dilution, etc., and have expressed their opposition to this plan.

In January this year, a Delaware judge ruled that Musk's long-term compensation plan was invalid on the grounds that the compensation was "excessive" and Tesla's board of directors failed to prove that "the compensation plan was fair." Musk posted a direct response on X at the time: "Never set up your company in Delaware." This also led Tesla to plan to move the company's registration place from Delaware to Texas.

Of course, the court ruling also caused dissatisfaction among a large number of netizens, because in the eyes of many people, without Musk, Tesla would not be able to get out of the predicament and achieve its current results. Tesla Musk’s leadership is still needed next. A large number of netizens tweeted in support of Musk on X:

I don't care what you think about Musk's compensation, but every shareholder I know would be happy to hire a CEO like Musk and would accept the terms of 2018. That is, if the company's value increases by 1900% within 6 years, Musk will receive approximately 9% of the shares as a reward.

Musk also responded to these tweets: "If the CEO of any company accepts my terms, then you must buy the stock of this company! You can propose such performance goals to any CEO of a Fortune 500 company, anyone Neither will accept it.”

As supporters became more vocal, Tesla asked shareholders in April to re-vote the compensation package at its annual shareholder meeting. Robyn Denholm, chairman of Tesla's board of directors, said in a letter to shareholders: "If Tesla shareholders hope to continue to incentivize Musk to work for Tesla, it becomes critical to re-approval of the $56 billion high compensation plan promised in 2018. "

This also seems to imply that if the shareholders meeting re-votes not to approve the compensation plan, Musk is likely to leave Tesla and find another job.

According to Tesla's regulatory filing in April, Tesla's latest valuation of this compensation package is US$44.9 billion. This is because Tesla's stock price has fallen by 40% in the past year, so the incentive returns have also been reduced. .

Although the compensation incentive plan once again passed a shareholder vote, Musk may need to further appeal to overturn the previous court ruling. If Musk can really get this incentive return, then the compensation will be paid in the form of stocks according to the agreement, and these stocks cannot be sold for several years.

More importantly, the voting results of this shareholder meeting also intuitively reflect Musk’s unique influence in Tesla. It can be seen that the vast majority of ordinary investors still support Musk to continue to lead Tesla. , believing that he is the only person who can lead the company forward. Likewise, this will further deepen Tesla's dependence on Musk. Musk's future words and deeds will have a greater impact on Tesla.

▲ Musk started dancing as soon as he entered the 2024 Tesla Shareholders Meeting

There is an interesting plot in "The Biography of Elon Musk". When Musk was the CEO of PayPal, he once asked the human resources director to buy a $100 million life insurance policy. The content of the policy was that if he had an accident, If you die, the company will receive a huge amount of compensation. This is indeed in line with his self-esteem character. Unexpectedly, Musk later contracted malaria while traveling abroad, which was indeed life-threatening. Fortunately, he was eventually rescued.

If he died, all our financial problems would be out of the question. But we're happy that he survived and things are gradually falling into place for the company, so we don't need that $100 million life insurance policy.

It can be seen that Musk has always wanted to have absolute control over the company, and his risk appetite is very aggressive. He not only wants money to continue investing in his business territory, but also based on the fact that he has been impeached by companies many times in the past. After losing power, Musk also wants to further consolidate his absolute control over the company to support his lofty ideals such as colonizing Mars.

So in addition to the compensation plan, Musk is also fighting for 25% of Tesla’s voting rights. He has said that if he fails to obtain more shares in the company, he may withdraw Tesla’s investment in artificial intelligence and robotics. R&D work, preferring to build products outside of Tesla. This is something that is impossible for Tesla to accept, and it is destined that Tesla will never be able to do without Musk, the "Iron Man of Silicon Valley".

Tesla, in urgent need of product refresh, has announced three “new cars” on the road

Now that the shareholder meeting has voted to approve the sky-high salary package, Musk seems to be quite happy. During the keynote speech, he continued to share Tesla’s latest progress in electric vehicles, solar technology, energy storage solutions, and the humanoid robot “Optimus”. .

Regarding Tesla’s new models, Musk happily said:

"We are developing some new products that I think will be very special."
"Perhaps at the beginning, people will think that some of these products are not amazing, but wait and see, they will be amazing."

Indeed, the Tesla models currently on sale are already relatively outdated. The Model Y, which has been on the market for 4 years but has never been significantly revised, can no longer bring much new ideas to people; and the new Model 3, which has just received a "refresh" When faced with a large number of new cars in 2024, the competitiveness is not as obvious as in the past. This caused Tesla to experience another decline in global deliveries in the first quarter of this year, and its stock price fell in response. In this regard, Tesla urgently needs to launch new and exciting products.

In the keynote behind Musk, we can see the product matrix of Tesla's full range of models, including the S3XY model on sale, as well as the recently launched Cybertruck and pure electric truck Semi, as well as three models covered with canopies , is the "new product" in Musk's mouth.

The two cars in the first row have basically the same appearance, with similar streamlined sedan silhouettes. They are likely to be the rumored "entry-level models" and the Robo Taxi, which was launched in August this year.

The other car has a relatively more "square" silhouette, with a slightly raised front and a vertical rear design. It is likely to be an MPV model.

Among them, entry-level models have always been regarded by the outside world as Tesla's most important growth point. In the financial report meeting in October 2022, Musk mentioned this car for the first time, which is smaller and cheaper than Model 3. .

▲ Imaginary picture of Tesla’s entry-level model

According to Musk's vision, the cost of this new car is about half of the Model 3, with a selling price of US$25,000. It is likely to become Tesla's best-selling model after its launch in the future, even higher than all current Tesla models. Sum.

▲ Model Y is the best-selling pure electric model in the world

However, according to Tesla's original plan, this new car will not be officially launched until the second half of 2025. In the increasingly fierce new energy vehicle market, Tesla's pace seems to have fallen far behind. Taking a closer look at the reason, it may be that after Tesla launched Model Y, it spent too much resources on the Cybertruck, which has a narrower track and is more difficult to mass-produce. And this Cybertruck has repeatedly missed the mark. From its debut in 2019 to mass production in 2023, the global new energy vehicle market has also undergone earth-shaking changes. This is obviously unexpected for Tesla.

However, Musk remains optimistic. He said that Cybertruck has achieved a production capacity of 1,300 units per week, and the goal is to reach 2,500 units per week by the end of the year. The Cybertruck, designed specifically for North America, will also be ready to be launched in other markets within the next year, especially by obtaining relevant automotive certifications for the Cybertruck in other markets. Of course, this process is not simple, so it may not be planned until Cybertruck achieves mass production. At the same time, we will also prepare cost expectations for the adaptation of Cybertruck when it enters other markets.

As for the not-so-common Tesla Semi, Musk also specifically named it, saying that Semi's mass production plan had been approved last week, and Semi is expected to make a contribution to profitability that exceeds market expectations. According to Musk's vision, if it is a commercial fleet, they often only look at numbers to make decisions, so Tesla will make them realize that pure electric trucks can bring greater benefits and save more money. Money makes them willing to choose Tesla Semi – "Who can't live with money?"

Indeed, in the Chinese market, we can already see quite a few pure electric trucks being chosen by commercial fleets, and many places have even begun to use pure electric dump trucks.

But on the other side of the new car, the "autonomous driving" capability that Tesla has always used to attract users and investors has allowed Musk to regain confidence in addition to sales.

If you think of Tesla as a car company, that's the wrong framework.
If someone doesn't believe Tesla will solve the self-driving problem, I don't think they should be an investor in the company.

As we reported before, Tesla has pushed out the FSD Supervised update to North American users, successfully removing the "Beta" label. It can drive Tesla anywhere for FSD driving, and the vehicle can automatically Perform lane changes, choose intersections independently, and complete left and right turns in the presence of other traffic participants.

Although FSD Supervised is still L2 autonomous driving that requires driver supervision, it can still make users excited. Tesla also said that the latest v12 version of FSD is the world's first "end-to-end" autonomous driving system based entirely on neural networks, putting the entire process of "perception-decision-control" into a unified system framework. , training is completed through deep learning methods. In other words, this is truly "driven by AI."

Taking autonomous driving capabilities a step further, Tesla is expected to launch the Robotaxi product on August 8 this year. The new car will be built on Tesla’s next platform and is expected to be equipped with “true autonomous driving” functions. L4 level autonomous driving capability.

In a video officially released by Tesla, you can see a never-before-seen cabin design that only provides front conjoined seats, but radically eliminates the steering wheel design.

Employees who recently left Tesla have told the media that Robotaxi is defined as a rugged product to handle long periods of unattended operation. In order to meet the sustainability of the business model, Robotaxi needs to achieve low operating costs and the product itself must be easy to clean and maintain.

▲Tesla driverless taxis depicted in "The Biography of Elon Musk"

The Robotaxi that Musk emphasized is actually a set goal in "Tesla's Grand Vision Chapter 2". Tesla not only plans to operate its own fleet, but also plans to allow Tesla owners to use their cars during idle periods in the future. Sent to shared fleet for operation. Musk once again introduced this sharing model at the just-concluded 2024 shareholder meeting, and said that the profits from the shared operation may cover the cost of buying a car for car owners.

Of course, this is just a beautiful vision in Tesla’s current plan. Whether it can be realized remains to be seen.

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