How Musk and Oligarchs Are Consolidating Power and What We Can Do To Fight Back
By: Natalia Renta
Months after Elon Musk’s self-serving deployment of DOGE to gut federal agencies inspired a song titled “Hostile Government Takeover,” Tesla’s annual shareholder meeting on November 6th will be another flashpoint in the world’s richest billionaire’s attempt to consolidate power over the economy and the rest of us. It’s time to stand up and fight back.
Trillion Dollar Payday
The most outrageous, headline-grabbing item on the Tesla ballot for shareholders is the proposed $1 trillion pay package for Musk. Trillion … or one thousand billions. It is many, many times larger than the pay packages of the highest paid CEOs.
Money at that scale is simply about raw power, and the pay package in no way restricts his political activities or requires him to stick to his knitting at Tesla (one of the purported justification for making Musk a trillionaire). He would remain free to become distracted by chainsaws, implanting computer chips in monkeys, or whatever suits his trillionaire fancy that particular week.
Entrenching Corporate Power
But there are other important issues on the shareholder ballot related both to Musk’s pay and to a broader effort to consolidate power over corporate decision-making, our economy, and our lives in the hands of just a few corporate insiders like Musk.
Musk played a big role in triggering a race to the bottom in state corporate law that is increasing the power of corporate insiders while decreasing the ability of shareholders like pensions to hold them accountable for self dealing, outrageous CEO pay, and other corporate chicanery. Last year, a Delaware judge invalidated Musk’s previous $56 billion Tesla pay package, calling it “an unfathomable sum.” Musk went on the attack, derided her and Delaware corporate law, and reincorporated Tesla in Texas. Delaware, Texas, and Nevada have all weakened their corporate laws to tilt them in favor of a small group of insiders at the expense of regular shareholders.
Shareholders Trying to Overturn Near Immunity from Corporate Wrongdoing
Two Tesla proposals are trying to restore shareholder rights over corporate oversight after Texas changed its laws since Tesla’s relocation. One Texas law allows companies to change their rules to require shareholders to own at least 3 percent of the company’s stock before they can bring lawsuits against corporate insiders for wrongdoing that harms the company.
Tesla amended its corporate bylaws under the new Texas law to effectively immunize itself from shareholder lawsuits. Owning 3 percent may not seem like a high threshold, but an investor or group of investors would need to own over $40 billion worth of Tesla shares to challenge corporate misdeeds. This might explain why shareholders haven’t brought suits against Musk for negatively impacting Tesla’s reputation and brand through his political activities.
And the investor who successfully challenged Musk’s $56 billion pay package only had 9 Tesla shares. If that 3 percent ownership threshold continues to stand, it would be essentially impossible to challenge his $1 trillion pay package — even though it is nearly 18 times bigger. One Tesla shareholder proposal would repeal this bylaw change so shareholders can regain this avenue for corporate accountability.
Restoring Shareholder Oversight and Ousting Musk Pals at Tesla
The other Texas law allows corporations to require a 3 percent or $1 million ownership threshold to submit shareholder proposals. Shareholder proposals let regular shareholders push companies to address important issues like union busting, political spending, climate risks, and more. Tesla has yet to amend its bylaws to take advantage of this law, and there is a shareholder proposal seeking to prevent that from happening.
Tesla is also asking shareholders to support the reelection of three directors with close ties to Musk. These close Musk allies have effectively given him free rein to dabble in Trump’s efforts to weaken federal government agencies and sideline his responsibilities at Tesla. Ira Ehrenpreis was an early investor in Musk’s companies and has sent him text messages like “love you man.” Joe Gebbia even withdrew from a board compensation committee because of his close ties to Musk. Kathleen Wilson-Thompson has received Tesla compensation far above directors on other corporate boards and owes a significant portion of her net worth to Tesla. Tesla shareholders deserve truly independent directors who watch out for their interests.
Stop Using Tesla as a Piggy-Bank to Shore Up Other Musk Ventures
There is also a proposal to get Tesla to invest in xAI, a privately-held company controlled by Musk. This is another example of Musk siphoning Tesla resources to his other companies, like when he diverted AI processors from Tesla to X. He may need Tesla to prop up xAI since it has been burning through $1 billion a month.
Tesla shareholders can either check Musk’s corporate power grab or vote to cede him more and more control. These votes will likely set the stage for similar attempts by other oligarchs to consolidate their own power. You don’t need to be a direct Tesla investor to fight back against this corporate takeover attempt. You can get your voice heard on these issues by sending letters to your state financial officer because many public pensions invest in Tesla and they have a vote. Your retirement savings may include Tesla, and you can write to your mutual fund manager as well. Musk and the other corporate titans are trying to reorient the economy, government, and the country to massively enrich themselves at our expense. It is time to stand up to this power grab.