Tesla, Inc. TSLA CEO Elon Musk created a furor earlier this month by seeking more voting control for himself in the electric-vehicle company, and he gave additional color on it on the fourth-quarter earnings call and a post on X, formerly Twitter.
What Happened: Musk is wary of some random shareholder advisory firm voting him out at a stage when he grows Tesla into an “artificial intelligence and robotics juggernaut of truly immense capability and power.”
He expressed the fears while answering a shareholder question on the earnings call on whether retail shareholders should be concerned about his unwillingness to expand the company’s AI and robotics capacity if he was not vested with 25% voting control.
Musk noted that Tesla has had a lot of challenges with Institutional Shareholder Services and Glass Lewis, both of which are proxy advisory firms that advise shareholders as to how to vote at corporate shareholder meetings.
“There’s a lot of activists that basically infiltrate those organizations and have, you know, strange ideas about what should be done,” the billionaire said.
“So, you know — so, I want to have enough to be influential — like, if we could do a dual-class stock, that would be ideal. I’m not looking for additional economics; I just want to be an effective steward of very powerful technology.”
The 25% number was roughly picked, Musk said. “That’s not so much that I can control the company even if I go bonkers. And if I’m, like, mad, they can throw me out, but — but it’s enough that I have a strong influence,” he said.
Musk said he is aiming for a “strong influence” but not “control.”
See Also: Everything You Need To Know About Tesla Stock
Clarifying further in the X post, he said, “This is my concern re Tesla voting control. Money doesn't matter if powerful technology goes awry.”
While outlining the reasons for low institutional ownership in Tesla, Future Fund’s Gary Black mentioned “key man risk” as one. The fund manager was apparently referring to Tesla’s overreliance on Musk for its product innovation, production, and execution, among other things.
That being said, AI and robotics are key for Tesla’s growth in the coming years. AI is central to the fructification of the company’s self-driving tech, which is expected to bring in a recurring stream of high-margin revenue when it is perfected. Robotics will go a long way toward improving production efficiency.
As of May 2023, Musk owned 411,062,076 Tesla shares, accounting for a little under 13% stake in the company. His stake could go to 20%+ Musk could own 20.6% if he takes possession of 303,960,630 shares through exercising of options he was vested with.
In premarket trading on Thursday, Tesla shares slumped about 8% to $191.25, according to Benzinga Pro data.
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Read Next: Tesla’s Next-Gen Vehicle: What We Learned From Q4 Earnings Call
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