Elon Musk wants more voting control at Tesla

Tesla CEO Elon Musk says he’d be uncomfortable growing the vehicle maker to be a leader in artificial intelligence (AI) and robotics without having at least 25% voting control of the company, nearly double his current stake.

Musk said this week in a post on social media platform X that unless he got stock in the world’s most valuable electric vehicle (EV) maker that was “enough to be influential, but not so much that I can’t be overturned”, at Tesla, he would prefer to build products outside the EV manufacturer.

Musk’s warning about developing AI and robotics outside Tesla unless he gets more voting control could infringe on his duties as CEO, governance experts and analysts said.

He has long touted Tesla’s partially automated “full self-driving” software and its prototype humanoid robots, but the EV maker generates most of its revenue from its automotive business.

He also promoted Tesla’s Dojo supercomputer to train AI models, which Morgan Stanley analyst Adam Jonas said in September could boost its market value by almost $600bn by helping to speed up its foray into robotaxis and software services.

Tesla’s shares were up this week, but have fallen by more than 11% since the start of the month.

Multibillionaire Musk owns about 13% of Tesla stock after selling billions of dollars of shares in 2022, partly to help finance his $44bn purchase of Twitter.

In a separate post on X, he said he would be fine with a dual-class share structure to achieve his goal of getting 25% voting control, but was told it was impossible after Tesla’s initial public offering (IPO).

“It’s weird that a crazy multiclass share structure like Meta has, which gives the next 20+ generations of Zuckerbergs control, is fine pre-IPO, but even a reasonable dual-class is not allowed post-IPO,” he said, referring to the Facebook parent’s founder Mark Zuckerberg.

Companies with dual-class structures have two or more types of shares with different voting rights — usually one with greater voting rights for founders or early investors and another for other shareholders with less voting power.

Tesla did not respond to a request for comment.

Musk currently faces a lawsuit over his compensation package. Tesla shareholder Richard Tornetta sued Musk and the board in 2018 and hopes to prove the co-founder used his dominance over Tesla’s board to obtain an outsize compensation package that did not require him to work at the EV maker full time.

Musk said on X there was no “feud” with the board over his new compensation package and said the pending verdict was holding back the discussions.

Reuters