On June 13, some Tesla shareholders filed a lawsuit against the company's CEO Elon Musk and other executives on the grounds that they believed Musk sacrificed the interests of Tesla to benefit xAI, an artificial intelligence company he founded in 2023.
Shareholders pointed out that Musk not only poached key employees from Tesla, but also transferred GPU resources worth at least $500 million to xAI, and used Tesla's data to develop xAI without giving Tesla corresponding compensation.
Complaints from major shareholders
In the lawsuit, shareholders cited a previous tweet by Musk in which he said he would consider moving the artificial intelligence business out of Tesla if he failed to gain 25% voting control of the company.
Shareholders viewed it as an open threat that Musk could deprive Tesla of business opportunities unless his conditions were met.
Furthermore, Musk has publicly positioned Tesla as an AI-focused company on numerous occasions, which in part explains why he has shifted resources and attention toward xAI, to Tesla’s detriment.
According to the documents, Musk's series of actions created hundreds of billions of dollars in value for xAI, while Tesla suffered considerable losses.
Major shareholders requested multiple compensation for losses
In the lawsuit, the shareholders formally accused Musk of violating his fiduciary duties as a Tesla executive and believed that other board members had the same problems. The shareholders also emphasized that the board members were unable to be impartial when dealing with issues involving Musk.
The plaintiffs further allege that Musk has gained undue benefits from the movement of people and resources between companies, and they argue that it is unreasonable to allow Musk to retain those benefits.
Therefore, the shareholders asked the court to intervene, award Tesla damages for the transfer of personnel and resources, and force Musk to give up his shares in Tesla, while implementing a constructive trust for his interests in xAI and taking other necessary remedial measures.
Shareholders meeting approves Musk's $56 billion pay package
Although shareholders filed a lawsuit against Musk's resource transfer, at another annual shareholder meeting, Tesla shareholders approved Elon Musk's $56 billion compensation plan by a large margin. This decision is in stark contrast to the lawsuit, showing shareholders' trust and support for Musk and their recognition of his contributions as the company's leader.
The shareholders' meeting also decided to move Tesla's legal seat from Delaware to Texas. This not only increased Tesla's leverage in the controversial case in the Delaware court, but also marked the beginning of Musk's relationship with the state. Tesla's board of directors scored a notable victory in its battle with major investors. Broad support from large institutional and retail investors ensured the pay package was passed despite facing opposition from major investors such as Glass Lewis and ISS.
Shareholders remain confident in Musk's leadership, believing that Musk is an important driving force behind Tesla's success and looking forward to Tesla's continued innovation and development under his leadership. Although Tesla's recent sales and profits have slowed down, shareholders voted in favor of Musk's compensation plan, showing their confidence in the company's future development.
However, this compensation plan has also caused some controversy. Some investors believe that such a salary is too generous for a leader who is in charge of multiple companies and faces strategic turmoil at Tesla. Tesla's board of directors said that the compensation plan is a recognition of Musk's contribution to Tesla in the past few years, and is also to ensure that he can continue to contribute to Tesla's future development. #马斯克 #特斯拉 #xAI #诉讼
Conclusion:
The voting results of Tesla's shareholder meeting and the lawsuit against Musk reveal the complex relationship between corporate governance, shareholder rights and executive responsibility. The shareholders' decision shows that despite their differences, they generally recognize Musk's contribution to Tesla's long-term development and are willing to support him to continue to lead the company.
However, lawsuits also remind us that resource allocation and executive behavior within a company need to be transparent and fair to safeguard the interests of all shareholders and fair competition in the market.
As Tesla continues to pursue innovation in electric vehicles and sustainable energy, shareholders and the market will closely watch how the company responds to these challenges and ensures a balanced balance of interests and sustainable development.
