-
Kimbal Musk supports Elon Musk’s pay package and plan to invest in xAI.
-
Musk’s pay and Tesla’s investment in xAI are key issues ahead of Tesla’s shareholder meeting.
-
Some investors are skeptical of Musk’s interim pay package and of Tesla’s pivot into robotics.
Kimbal Musk weighed in on his brother’s Tesla pay package and Tesla’s potential investment in xAI.
“I think my brother deserves to be paid,” the younger Musk said Friday on CNBC’s “Squawk Box.” “He has zero pay for the past six to eight years. I don’t think that’s right. I’ll let Tesla shareholders make that decision, but I believe that it does need to be. He needs to be paid.”
“Tesla can’t go without a deep, deep understanding of AI. We have a great business relationship with xAI,” Kimbal Musk, who sits on the Tesla board, added. “I will again let the shareholders decide that, but we are Tesla, an AI company. As any advanced technology company — Nova, Tesla, others — AI is built into everything you do.”
Tesla did not immediately respond to a request for comment.
The question of Elon Musk’s pay and whether Tesla should invest in xAI, which is Musk’s AI company, are both contentious issues ahead of the company’s November shareholder meeting.
Musk doesn’t receive a salary or cash bonuses at Tesla. Instead, he receives stock-based performance awards tied to milestones the EV maker achieves.
A Delaware judge struck down Musk’s $56 billion pay package in January 2024, ruling that Tesla’s board had failed to properly justify what would be the highest pay a public company CEO has ever received in the US. Even though the shareholder upheld his pay package, the judge upheld her ruling again in December 2024.
Tesla has been appealing the ruling since, and the legal limbo has left Musk without compensation until earlier in August, when Tesla’s board granted Musk an interim package worth roughly $29 billion in stock, equal to about 96 million shares.
The move was to incentivize Musk to focus on the company, and he can only claim the new award if he remains in a top executive role for another two years. The company would be voting on a long-term pay plan for Musk in the November shareholder meeting, according to an August 4 shareholder letter.
Musk also made clear his desire for Tesla to continue to invest in xAI, in a tweet in July that said Tesla would have invested in his AI company “long ago” if it were entirely up to him. The issue will also be put to a shareholder vote in November, according to Musk’s post on X.
Not every shareholder is in agreement with the board and Musk’s plan.
The SOC Investment Group, which represents union pension funds, urged Nasdaq on Wednesday to investigate whether Tesla violated listing rules by not securing shareholder approval for the interim pay package.
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, who manages between $60 and $70 million worth of Tesla shares, previously told Business Insider that he is skeptical of Tesla’s pivot away from its core EV business into robotics and cab services.
Read the original article on Business Insider