Norway's sovereign wealth fund aims to zap Musk's monster Tesla pay deal Norway's sovereign wealth fund aims to shoot down Elon Musk's planned $56 billion compensation package at Tesla's annual shareholder meeting scheduled for Thursday this week, June 13. The fund, operated by Norges Bank Investment Management (NBIM), said on Saturday that it "voted against a Tesla proposal to ratify performance- …
The stupid system of carbon trading created profits.
The share price is maybe x100 inflated due to speculators.
It's not real wealth, nor is Elon Musk's shareholding.
Look at profit from vehicle sales for Tesla vs share price and sales & profits vs share price at other carmakers. Look at ordinary shareholders' dividends.
Tesla boosted by Musk's initial real investment via luck (X finance being bought out with shares, ebay buying the PayPal shares).
Most of Tesla's "boosting" by Musk has been dubious hype. They'd be better off if he loses interest. He's hardly done much to earn 560K never mind 56 Billion. Madness.
And Elon is just a magnet for lawsuits at this point.
Tesla's management are either going to be fired and/or sued by Musk, or by angry shareholders as Musk claims more than the company will ever make in profits. They are clearly conflicted, as the whole pay package was the incentive for the massive internal pump-and-dump operation that Elon has been caching out on to fund his amazing ability to lose money on other ventures. The inflated share price can't hold, and Elon personally ruined the cult of personality around him and Tesla be becoming the exact opposite of the person their ideal customers look up to. Now people see Tesla owners not as well to do and perhaps a bit naive but probably successful, but toxic and entitled idiots with no common sense. One of those is a better brand identity than the other.
Tesla is just a small car company in the face of large competitors. They already Nokia'd away their technical lead. Association with Elon makes it dead as an aspirational or style brand. The aren't innovating, and lie to both customers and investors about product lines to juice the short term stock price by constantly announcing vaporware.
If Elon was actually delivering on all the hype, and Tesla was building factory robots that worked, cargo trucks that truckers would actually drive(or could hand a clipboard to someone at street level from), or battery and auto-pilot tech that could be sold to other vehicle OEMs at a profit, and scaling both sales and production then a bigger payday might be in order. He isn't delivering, neither is Tesla or it's management. So paying him now that the courts weighed in is just putting their necks in a noose for the inevitable shareholder/hedge fund/class action lawsuit.
According to the March 2024 financial statement, Tesla's quarterly revenue is 21.3 B$, net income is 1.13 B$ and "Net change in cash" is -4.73 B$. Income and profit margins are down some 50% year-on-year, indicating that the market is not moving in the right direction for Tesla. The company future may strongly depend on protectionistic policies because Asian carmakers (especially in China) now sell similar sized electric cars at much lower prices. But protectionism carries its own dangers, because it may erode international sales.
So I guess it's quite a big question whether Tesla can ever earn back that 56 B$ Musk bonus. How do they even propose to fund that bonus? Will Tesla end up as a highly leveraged (i.e., indebted) company that folds as soon as interest rates go up? Institutional investors might end up liable if they vote so blatantly against their stakeholders interests.
Well, as it's Norway's SWF, this is the entire country's pension fund for when North Sea oil and gas retire.
In that respect, all Norwegian citizens have an interest in the matter. The fund's sake in Tesla is worth about $5bn at the moment, Norway has a population of 5.5m, so each citizen of the country has circa $800 invested in Tesla. This puts the fund's manager's in a bind. If they do vote for it, then they dilute the fund's share of Tesla, and agree one of the most egregious and undeserved pay packages of all time. If they vote against, and that view holds sway, then the gobby, easily distracted manchild will throw a hissy fit, with unknowable consequences. Whilst opinion in these forums is that Tesla would be better off without Elmo, if he goes off in a huff then in the short term there's an excellent chance Tesla market cap drops with a loud thud - and Norway's SWF might find it a challenge to explain how they converted $5bn into say $3bn.
On a side note, Norway recognised early on that the North Sea was one off casino win, and established a sovereign wealth fund now worth around $250k per citizen. Here in Shitain, government of all persuasions (mostly but not only Conservative) simply saw the North Sea as a piggy bank to raid for current expenditure and put none aside. North Sea oil and gas will have no legacy for the people of the UK, like the cheap deals at a certain supermarket, "when it's gone, it's gone". The same people responsible will be knocking on your doors soon to ask for your vote.
Oddlegs,
You've forgotten, it's mandatory to always criticise the UK/the UK government on these pages...
My understanding of SWF's is that they are as much about controlling the expenditure of wealth in the home country (and thus preventing extreme inflationary pressures) as 'saving for the future'. So SWF's tend to invest anywhere and everywhere but their home country (Norway's SWF investing in the US company Tesla, for example).
As you note, Norway had/has a much smaller population that the UK (and a smaller overall economy, to match), so their North Sea income couldn't all be spent in Norway without causing massive price rises and basically stuffing their economy, The higher UK population (and larger UK economy) meant that we could/can treat all North Sea income as just another revenue stream, as a proportion of total national income, it's not large enough to actually distort the economy.
Really don't understand the down votes for stating a fact so I'll try phrasing it another way:
The most the government has ever earnt from oil and gas revenues was about £12B in 2008-09. In that same year we borrowed well over £150B so where exactly was the money for this magical sovereign wealth fund coming from? We've run a budget deficit in all but a handful of years since north sea oil was discovered. Any SWF would have been funded by borrowing more.
North sea oil revenues are just nowhere near as big as people think they are once you've spread them over 60-70M people
according to Farage
Nothing new there then. We went with the begging bowl to the IMF during the Wilson/Callaghan years and when Brown stopped being PM, we were just as skint.
The current shower couldn't manage a piss up in a brewery.
The big question is ...
Will Starmer keep the loony left of his party under control long enough to for him to sign away the £££ and take us back into the EU.
If Norway was worried about making a loss on the investment, it would already have got out. Institutional investors are normally quite relaxed over things like this. If the manchild throws out all his toys and leaves, they'll get to see whether the rest of the company is able to do a job and, if it is, then they'll be okay. And, if not, they can bring new people in, or and possibly more likely, look for a takeover or merger, which will also bring $$$ for anyone looking to "consolidate".
And, it's not beyond the realms of possibility that Musk does nothing if he doesn't get his way.
Yep this is why sovereign wealth funds or large pension funds invest very widely, so that no one company is going to have any material impact on it. They will make governance decisions based on how they think governance should be done, not by taking into account the potential for man child tantrums from the CEO or that turning down his blackmail will cause the stock to fall.
Temperatures in winter easily drop to -10°C in many places there.
That's positively balmy for many places in the US. Even here in the Southwest (albeit in the mountains) we normally go below -20°C in December. When we lived in Michigan, on average temperatures went well below -10°C at least a few days a month for a third of the year (December through March). Chicago, Boston, and NYC are progressively a bit more mild, in terms of mean low temperature, but still routinely see temperatures below -10°C in the winter months.
I'm no fan of Teslas or of EVs in general,1 but it seems to me that Norway isn't necessarily a harsher environment for them than much of the US, particularly when the US regions are adjusted for population density (i.e., it gets cold in the places where many of the potential drivers are). I remember the stories about Tesla owners having problems in the winter — I'm just suggesting that cold-weather problems might not be any more significant in Norway than in much of Tesla's home market.
1I mean, if they work for you, fine; but they don't for me, and the infrastructure is very much not there yet to switch wholesale from CVs yet.
Tesla is the the best selling car in Norway. If Teslas don't work well in this climate, then the others are no better. Most others are still in the age of using inefficient heat cores (looking at you Ford Mach-E); Teslas use a pretty advanced heat pump system with a variable refrigerant flow distribution system (Octovalve).
Is he worth it? No. Even if there's some value attached to clueless mugs believing Musk's repeated outlandish claims, it'd be nice if leaders were rewarded for creating a decent product, treating their employees well, and actually caring about their customers.
If we work on the assumption* that Tesla shares are massively overvalued & rapid sale of 20% would likely cause a huge drop in share price..
Musk still holds just under a quarter of Tesla shares, not sure how many are still under "n" year golden handcuffs type agreements, but reasonable to assume he still has hundreds of millions of shares to sell, which could significantly reduce the Tesla share price if he sold them all as quickly as possible & the big shareholders would see their investments plummet (and if they tried to sell, would make things even worse).
Wonder if his petulance is such that he would threaten to do what would essentially be a fire sale unless he gets his billions? .. Though cannot discount the fact he's too arrogant to be aware of how overvalued Tesla is ( thus the sale would not make sense to him or anyone who thought Tesla share prices were actually sensible).
* Not everyone thinks this, but plenty of people do. Need a tulip icon!
Most of the institutional investors can afford to hold their shares through any instability caused by Musk offloading his stake. A bigger problem is that there's no culture of competent corporate management to takeover. The board and senior managers are Elmo's cronies, and wouldn't be able to run a modern corporate entity well, and with Elmo being the centre of Tesla's persona and culture, ripping him out means loss of faith, uncertainty. Problems that currently are uncritically accepted (because Elmo's a genius and will figure it out) will be examined, debated and pressure the new management - important stuff like the shonky quality, the lack of new models to replace ageing lines, the lack of a clear strategy to bring earnings up to the level the stock price requires for fair value, all the legal shit where Elmo has over-promised and underdelivered on self driving, etc etc.
I'd agree Tesla is its own bubble, but it coexists in the context of the similarly over-valued and under-managed FAANG stocks and all the ridiculous Silicon Valley unicorn outfits. Eventually something has to give, like every other bubble, but the markets seem to need a signal. Maybe Elmo flouncing off could be that signal, but I'd have thought something more fundamental is needed.
this:-
Most of the institutional investors can afford to hold their shares through any instability caused by Musk offloading his stake
Change one word as follows.
Most of the institutional investors can afford to hold their shares through any instability caused by Trump offloading his stake
and you get the situation in Trump Media.
Like son like Father
The board and senior managers are Elmo's cronies, and wouldn't be able to run a modern corporate entity well
Yes. Denholm's fawning encomium is just a further demonstration of that. If Tesla is going to survive, it needs, first, a new board, and then replacing the C-suite that has failed to rein Musk in. Unfortunately I don't think the institutional investors could organize a majority of shareholders to force the current board out.
And there still seem to be plenty of smart, informed people who remain convinced that Musk is some sort of visionary savior. I don't think Tim Urban ever publicly retreated from his hagiography of Musk, for example. The cognitive traps around cults of personality can be hard to escape.
"if [Musk] sold all [his Tesla shares] as quickly as possible [...] the big shareholders would see their investments plummet"
But then Musk would see his personal wealth plummet. His exposure to Tesla is certainly much larger than that of other big investors, so he has the biggest interest of them all to keep the share price afloat. Unless if he can just pull some cash out of the company. No downside, really to eating 10% of the cake (company value) right now in cash and then sharing the rest of the cake (company value) with the other investors.
With 13 billion dollar debt and a negative cash flow in Twitter, I'd imagine that Musk has some interest to protect his personal wealth ... don't ever want those banks come knocking to ask whether you can still pay back your loans.
Where Abbot will ask 'how high do you want us to jump master?'
It would be nice for the rest of the USA if Texas did succeed from the Union. There is little or no corporate governance in the lone star state. They will be the next to ban breaks for workers to take in fluids when the temp is over 100F. Then Abbott will follow Florida and making any talk of climate change virtually illegal. It won't be long after that when someone asked Emperor Elon, 'can you fit a 7ltr V-8 into the cybertruk?
The USA is going downhill even faster than Blighty.
I think you are all missing the obvious. All Tesla cars are online and can be reprogrammed. So he gets on X, makes a post that says "If I don't have that 56 Billion in my bank account in 3 hours, I'm going to push this big red button and disable every Tesla in the world 'on the spot'. Middle of the interstate, on the way to the hospital, doesn't matter. If somebody dies it's YOUR fault, not mine. Signed Elon".
..and so he presses the big red button, and finds out it's just a Fisher Price toy that someone at Tesla gave him and told him it would 'stop all Teslas', just so he'd go away and stop asking for stupid things like flamethrowers and 'a big red button that stops all the cars'.
Working for Elon seems to be like looking after a toddler, you just have to keep them distracted so you can get on with your job.
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