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. This decision comes ahead of Tesla’s critical annual shareholder meeting and signals a notable shift in Koguan’s once steadfast support for Musk.
The Billionaire’s Bold Move
Leo Koguan, who Forbes estimates to be worth $5.9 billion and is recognized as Tesla’s top retail investor, has taken a stance that could influence the future of Tesla’s leadership and financial strategies. At the heart of Koguan’s decision is his growing disillusionment with Musk’s leadership, particularly his alleged neglect of Tesla amidst his commitments to other ventures.
In a candid revelation to Forbes, Koguan expressed his disenchantment: “He is temporarily back to claim his $55 billion ransom money. I am broken-hearted.” This statement reflects a drastic change from his previous admiration, where he once described himself as “Elon’s fanboy” and revered Musk as the only person he truly respected on Earth.
Discontent with Corporate Decisions
Koguan also voiced his dissent on other significant matters, including opposing the proposal to reincorporate Tesla in Texas, and disapproving of new board terms for Elon Musk, his brother Kimbal, and James Murdoch. Additionally, he voted against retaining PricewaterhouseCoopers as Tesla’s accounting firm, leveraging his substantial 27.7 million shares in these critical decisions.
The implications of Koguan’s votes are profound, as they coincide with Tesla’s struggle with slowing electric vehicle (EV) sales and the largest job cuts in its history. 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 TESLA car driven by two ladies had a break failure as per them. Two gentlemen guide them to safety but watch till end & it will surprise you. $TSLA pic.twitter.com/cyvqwiXeDx
— Naresh Nambisan | നരേഷ് (@nareshbahrain) May 18, 2024
A Rally for Support
In contrast, Tesla Chair Robyn Denholm has been actively encouraging shareholders to support the restoration of Musk’s 2018 compensation package, arguing that it would motivate Musk to drive growth and innovation at Tesla. The package, which was originally approved when Tesla’s market cap was under $60 billion, had vested fully by late 2022 as Tesla achieved significant financial and market cap targets.
Delaware Judge’s Ruling Impacts Elon Musk’s Compensation
The backdrop to this shareholder turbulence is a January ruling by Delaware Judge Kathaleen McCormick, who invalidated Musk’s pay package on grounds of conflicts of interest and undue influence over Tesla’s board. This decision not only affected Elon Musk’s compensation but also his standing as the wealthiest person globally, relegating him to the second position with a net worth of $195 billion as per Forbes.
High Stakes: Tesla’s Annual Meeting and Billionaire Investor Influence
As Tesla prepares for its annual meeting on June 13, the stakes are high, and the shareholder votes spearheaded by influential figures like Koguan will be pivotal in shaping the company’s governance and strategic direction. With Tesla’s shares experiencing a downturn and the broader implications of leadership decisions under scrutiny, the upcoming meeting is set to be a defining moment for the electric vehicle giant.
In a world where corporate governance and investor relations are increasingly under the microscope, the unfolding drama at Tesla serves as a compelling case of how billionaire investors can sway the future of tech behemoths through their voting power and public influence.
