• by Tanya Gazdik , May 19, 2024

Tesla Founder and CEO Elon Musk is facing increased scrutiny and pushback by his shareholders and the public over some of his recent business decisions.  

The pioneer electric vehicle company had a rough first quarter, with a 55% drop in year-over-year revenues and the automaker not hitting sales projections.

“Tesla has faced increasingly turmoil in recent months and it has come at a time when the company also faces increasing challenges at home and abroad. But much of the trouble has Musk at the center,” according to Headlight News. “The CEO has become increasingly controversial -- and, to some, toxic -- since his takeover of the former Twitter social media service where he has been posting increasingly extreme comments. According to critics, he has taken anti-Semitic and pro-fascist positions on several occasions. That has not only driven advertisers away from what is now known as X, but also led to some potential Tesla buyers switching to other brands.”

The turmoil could result in a cut in Musk’s gigantic compensation package.

“In a surprising turn of events, Leo Koguan, the billionaire investor and self-proclaimed Elon Musk enthusiast, has voted against restoring Musk’s substantial $50 billion compensation package,” according to MSN. “This decision comes ahead of Tesla’s critical annual shareholder meeting and signals a notable shift in Koguan’s once steadfast support for Musk.”

Koguan, a Singapore-based billionaire, has previously called himself an Elon Musk “fanboy.”

"Koguan, who claims to hold more than 27 million Tesla shares, said Musk is a ‘tyrant CEO’ who has abandoned the carmaker for his other companies,” according to Forbes. ““He is temporarily back to claim his $55 billion ransom money. I am broken-hearted,’ Koguan told Forbes.”

This disenchantment could have dire consequences for Musk. 

"The implications of Koguan’s votes are profound, as they coincide with Tesla’s struggle with slowing electric vehicle sales and the largest job cuts in its history,” per MSN. “Amidst these challenges, Elon Musk has been pushing forward with plans to pivot Tesla’s business towards selling robotaxi rides—a move seen as premature given the current state of autonomous driving technology compared to competitors like Alphabet’s Waymo.”

A Delaware court in February voided Musk’s stock options, awarded to Musk in 2018, that grew to be worth $56 billion — the most in U.S. corporate history.

“In response to the Delaware decision, the board introduced proposals to move Tesla’s state of incorporation to Texas and to reaffirm Musk’s pay,” according toFinancial Times. "The pay vote will not directly supersede the court’s decision but the carmaker hopes it will prove decisive in any future legal battle.”

Tesla Chair Robyn Denholm has been actively encouraging shareholders to support the restoration of the compensation package, arguing that it would motivate Musk to drive growth and innovation at Tesla.

Tesla’s annual board meeting is June 13.