Tesla’s board of directors has responded to one proxy advisory firm that recently urged its investors to vote against ratifying Elon Musk’s 2018 pay package, ahead of the upcoming annual shareholders meeting.
On Monday, Tesla’s board shared a four-page letter to shareholders on its website, detailing what it believes proxy advisory firm Institutional Shareholder Services (ISS) missed in its recent evaluation of the upcoming vote.
In it, the board writes that the firm was right to urge investors to vote in favor of proposal three, or moving incorporation from Delaware to Texas, adding that it missed important points in encouraging them to vote against proposal four, ratifying Musk’s previously approved $56 billion compensation package.
Far too much power is concentrated in the hands of “shareholder services” companies like ISS and Glass Lewis, because so much of the market is passive/index funds, which outsource shareholder voting decisions to them.
ISS and Glass Lewis effectively control the stock market.
— Elon Musk (@elonmusk) January 24, 2023
“Despite the recognition of the benefits of the 2018 CEO Performance Award to both Tesla and its stockholders, ISS ultimately reached the wrong conclusion about Proposal Four due to a technical misunderstanding around the Award,” writes the board.
Tesla’s board of directors also outlines four specific points ISS made in its argument against a vote in favor of ratifying the package, arguing that the firm doesn’t fully understand what ratification means—alongside other points.
The letter also includes a recent post on X from Musk, in which he said that the compensation plan would let the CEO “sell enough stock to pay the taxes,” the rest of which would need to be held for five years.
The deal allows me to sell enough stock to pay the taxes. The remaining stock must be held for 5 years, so it is impossible for me to cash out and run.
— Elon Musk (@elonmusk) June 1, 2024
Last week, ISS wrote that the pay package was “excessive, even given the company’s success,” noting that the firm is unsure if the award will “increase Musk’s focus on Tesla.”
The value of Musk’s compensation package was set and approved by shareholder votes in 2018, as part of a performance-based tranche system that would ultimately net him around $56 billion in Tesla shares for that time. The vote to ratify the plan comes after it was struck down and effectively voided by Delaware Judge Kathaleen McCormick in January.
Tesla shareholders have until June 13 to vote their shares on these and other proposals, and the company has recently used multiple avenues to encourage investors to vote yes on proposals three and four. Other firms have been divided on the vote, with some, such as Glass Lewis, encouraging shareholders to vote against the proposals, while others have urged stockholders to vote in favor of them—in accordance with board recommendations.
Last month, Tesla shared a website dedicated to showing investors how to vote, and encouraging them to vote yes on proposals three and four. You can visit that site here.
Tesla shareholder sues Elon Musk accusing him of insider trading
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Elon Musk
SpaceX issues statement on Starship V3 Booster 18 anomaly
The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX has issued an initial statement about Starship Booster 18’s anomaly early Friday. The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX’s initial comment
As per SpaceX in a post on its official account on social media platform X, Booster 18 was undergoing gas system pressure tests when the anomaly happened. Despite the nature of the incident, the company emphasized that no propellant was loaded, no engines were installed, and personnel were kept at a safe distance from the booster, resulting in zero injuries.
“Booster 18 suffered an anomaly during gas system pressure testing that we were conducting in advance of structural proof testing. No propellant was on the vehicle, and engines were not yet installed. The teams need time to investigate before we are confident of the cause. No one was injured as we maintain a safe distance for personnel during this type of testing. The site remains clear and we are working plans to safely reenter the site,” SpaceX wrote in its post on X.
Incident and aftermath
Livestream footage from LabPadre showed Booster 18’s lower half crumpling around the liquid oxygen tank area at approximately 4:04 a.m. CT. Subsequent images posted by on-site observers revealed extensive deformation across the booster’s lower structure. Needless to say, spaceflight observers have noted that Booster 18 would likely be a complete loss due to its anomaly.
Booster 18 had rolled out only a day earlier and was one of the first vehicles in the Starship V3 program. The V3 series incorporates structural reinforcements and reliability upgrades intended to prepare Starship for rapid-reuse testing and eventual tower-catch operations. Elon Musk has been optimistic about Starship V3, previously noting on X that the spacecraft might be able to complete initial missions to Mars.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Elon Musk
SpaceX Starship Version 3 booster crumples in early testing
Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
SpaceX’s new Starship first-stage booster, Booster 18, suffered major damage early Friday during its first round of testing in Starbase, Texas, just one day after rolling out of the factory.
Based on videos of the incident, the lower section of the rocket booster appeared to crumple during a pressurization test. Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
Booster test failure
SpaceX began structural and propellant-system verification tests on Booster 18 Thursday night at the Massey’s Test Site, only a few miles from Starbase’s production facilities, as noted in an Ars Technica report. At 4:04 a.m. CT on Friday, a livestream from LabPadre Space captured the booster’s lower half experiencing a sudden destructive event around its liquid oxygen tank section. Post-incident images, shared on X by @StarshipGazer, showed notable deformation in the booster’s lower structure.
Neither SpaceX nor Elon Musk had commented as of Friday morning, but the vehicle’s condition suggests it is likely a complete loss. This is quite unfortunate, as Booster 18 is already part of the Starship V3 program, which includes design fixes and upgrades intended to improve reliability. While SpaceX maintains a rather rapid Starship production line in Starbase, Booster 18 was generally expected to validate the improvements implemented in the V3 program.
Tight deadlines
SpaceX needs Starship boosters and upper stages to begin demonstrating rapid reuse, tower catches, and early operational Starlink missions over the next two years. More critically, NASA’s Artemis program depends on an on-orbit refueling test in the second half of 2026, a requirement for the vehicle’s expected crewed lunar landing around 2028.
While SpaceX is known for diagnosing failures quickly and returning to testing at unmatched speed, losing the newest-generation booster at the very start of its campaign highlights the immense challenge involved in scaling Starship into a reliable, high-cadence launch system. SpaceX, however, is known for getting things done quickly, so it would not be a surprise if the company manages to figure out what happened to Booster 18 in the near future.
SpaceX issues statement on Starship V3 Booster 18 anomaly
Tesla analyst maintains $500 PT, says FSD drives better than humans now
