Controversy Rises Over Tech CEO's Proposed Exorbitant Compensation Package
There's been a heated reaction from a high-profile CEO against agencies who have criticized a staggering $1 trillion proposed remuneration package. The CEO has not minced words, labelling these agencies as "corporate terrorists".
The CEO, unhappy with the term 'compensation' for the proposed package, indicated that the true concern isn't about the money. Instead, it's about whether he can maintain enough influence in the company to steer its future ventures in artificial intelligence (AI), autonomous vehicles, and humanoid robots.
Concerns Over Maintaining Influence
He expressed his discomfort with the thought of building a robotic workforce only to be overthrown due to the recommendations of these agencies. He stated that he needs around mid-20 percent voting power to uphold a strong influence in the company, yet remain just as susceptible to termination as any other employee if his actions were to be deemed inappropriate.
These comments were made amidst pleas from the company's executives for shareholders to back the upcoming vote on the CEO's remuneration proposal. The proposed package, if approved, would be the largest in corporate history.
The Historic Pay Proposal
The proposed package includes a plan to award the CEO up to $1 trillion in stock if he meets specific performance targets. These include increasing the company's market value to $8.5 trillion and achieving 12 operational milestones. Some of these milestones include selling 12 million cars, launching a million autonomous taxis, selling a million humanoid robots, and increasing adjusted earnings from $16.6 billion to $400 billion.
If the new pay package is approved, the CEO's stake in the company could increase from 13% to nearly 29%, granting him even more control over the company's direction.
The Stakes of Rejection
The company's board has cautioned that if shareholders don't approve the proposed package, the CEO might reduce his involvement in the company or potentially leave entirely. However, despite the warnings, some investors have been advised by the opposing agencies to vote against the proposal.
Supporters of the package, on the other hand, believe it will pass decisively. After the earnings call, the CEO criticized the opposing agencies for their outsized influence. He argued that they often vote based on political affiliations rather than the best interests of the shareholders, despite having no actual ownership in the companies they advise on.
The CEO has also suggested that these agencies should be registered as investment advisors, calling it absurd and potentially illegal that they are not.
Ongoing Battle Over the CEO's Remuneration
The dispute over the CEO's compensation did not originate this quarter. It commenced last year when a judge in Delaware rejected his 2018 compensation plan, valued then at approximately $56 billion. The judge ruled that the company's board had been unduly swayed by the CEO when it approved the plan.
Following the judge's ruling, the company sought to reapprove the package through a shareholder vote, insisting it was both fair and necessary to keep the CEO focused on the company. The company went above and beyond to rally investors, even running ads and sending letters to shareholders. Eventually, the shareholders voted to approve the pay package.
Mixed Reactions Over the Pay Package
Critics of the plan argue that it provides the CEO with too much control and insufficient accountability as he manages multiple ventures. Some have even questioned whether his venture into AI and humanoid robots distracts from the company's primary business.
Supporters, however, believe the pay package rewards the CEO for his vision, leadership, and role in establishing the company as an industry leader. One long-term shareholder stated, "Without his relentless drive and uncompromising standards, there would be no [company name]."