Tesla’s market cap is down more than $700 billion from its peak and investors are reeling, but CEO Elon Musk is still trying to make sure he gets paid.
The company’s share price has fallen 63% from an all-time high of $409 in November 2021, and its market capitalization has fallen below $500 billion for the first time in a year. Since January, the electric car maker has also suffered a number of setbacks, including the first year-over-year sales decline since the pandemic, hundreds of thousands of layoffs and the possible closure of a planned low-cost electric car.
That hasn’t stopped Tesla’s board from urging shareholders to approve a $45 billion CEO pay package in its proxy statement on Wednesday. Musk’s compensation package (then worth $56 billion) was scrapped by a Delaware judge in January.
The EV maker is now conducting another vote to get investors to approve Musk’s pay. The company’s chairman of the board, Robyn Denholm, argued that because the judge rejected Musk’s pay package, he “has not been paid for his work for Tesla in the last six years.”
While Tesla investors and Musk’s boosters are known for their fanaticism, the company’s recent performance has led to calls for change from some notable analysts and investors.
Dan Ives of Wedbush Securities, a longtime Tesla Bull, further told CNBC Wednesday that even though Musk deserves the big pay package, he faces a “fork in the road” and needs to turn things around.
“This is something that has gone from a Cinderella story to, in the short term, a horror show,” Ives said.
Tesla investor Ross Gerber, the CEO of investment adviser Gerber Kawasaki, agreed with Ives that Musk deserved the compensation but called out Tesla’s board for a flawed process that took away their credibility, he said in an interview with CNBC.
“I am super grateful to Tesla as an investment,” he says @GerberKawasaki as $TSLA shareholders prepare to vote on whether to reinstate @Elon Musk‘s $56 billion salary package. “For me it’s not about whether he deserves it or not. What matters is whether this board of directors can have any credibility.” pic.twitter.com/47JxiCBG5u
— Last Call (@LastCallCNBC) April 17, 2024
From the beginning, Tesla has marketed itself as the harbinger of an all-electric future, but lately competition from Chinese EV makers and slowing EV sales growth have threatened that goal.
Musk denied a Reuters report earlier this month that Tesla would scrap the Model 2, a long-planned low-cost EV, and focus instead on robotaxis. Still, Tesla’s CEO confirmed in a post on X that the company would release a robotaxi by August.
Some investors are already sounding the alarm about Tesla’s reorientation, including prominent Tesla investor and portfolio manager at Baron Capital Inc. David Baron.
“The Model 2 is a crucial part of our thesis. If they stop doing that, the investment thesis changes,” Baron told Bloomberg.
Gerber, of Gerber Kawasaki, also joined Baron in bashing Tesla’s diversion into robotaxis in a post on X.
Without a cheaper Tesla for the mass market, “there is no single financial model that works for Tesla. They need to develop a cheap Tesla,” Gerber wrote.
Gerber has long complained about Musk’s level of control at Tesla, suggesting in March that Tesla could turn itself around if it got “a real CEO.” Alternatively, Musk could double down on his focus on the company and say less, Gerber said. In February, Gerber continued to express his belief in Tesla’s long-term growth potential and Musk’s position at the company. His suggestion to Musk was to “just shut up,” Gerber told Yahoo Finance.
Tesla stock closed 3.5% lower at about $149 on Thursday.
This story originally appeared on Fortune.com
