I think Elon Musk deserved his $55 billion comp, but it doesn’t mean he should get it
I think Elon Musk deserved his $55 billion Tesla CEO compensation plan, and I voted for him to get it, but it doesn’t mean he should get it.
I would probably vote for it again. Hear me out.
There’s a lot of confusion among the reactions to the judge’s decision to rescind Elon’s $55 billion CEO compensation plan from Tesla.
The main arguments I hear from Tesla shareholders are that “I voted for the plan”, “the plan was successful for Elon, Tesla, and shareholders”, and “I don’t feel like I was misled by Tesla or Elon about this compensation plan”.
These arguments can appear valid, and Musk is currently amplifying them on X right now as he goes full propaganda mode to redirect the narrative amid the judge’s decision. He is pushing the narrative that the judge is taking away the shareholders’ right to decide for themselves, but it’s not as simple as that. Hear me out.
I can see how this argument is attractive; I sympathize. I voted for the plan myself back in 2018. And I think there might be an outcome to this that could make most people happy. So before you dismiss me as an Elon hater, please hear me out.
It’s a complicated situation, and I think that most people who are simply jumping to Elon’s defense have simply not read the judge’s decision. I know it’s long, but if you have any interest in this, and especially if you want to comment on this situation, I suggest you read it first. It includes a full chronology of the “negotiation” of the plan with an in-depth background based on testimonies and depositions from everyone involved. It’s undoubtedly a great look at how the biggest CEO compensation plan of all time came to be, and while I see Elon coming down hard on the judge or Delaware, Tesla’s state of incorporation and where the lawsuit was filed, I don’t see him disputing the facts in it.
To summarize, it’s not as simple as answering the questions: “is the package fair or unfair?” or even “did Elon deserve the package?”. He very well might have. Tesla achieved incredible things under Elon’s leadership. I’m the first to admit it, and despite all the hate McCormick is getting from Elon fans today, she also admits it in the decision. The problems that led to this litigation are more about governance, and I know this is a controversial issue at Tesla. There’s no hiding it. Elon didn’t want Tesla to be a public company. He said it several times and he is saying it again now. He would prefer it to be private, but it’s not. For better or worse, it’s a public company and it has to be governed as such.
Elon saved Tesla from death several times, but Tesla shareholders also saved Tesla. Tesla would have been dead without its strong base of shareholders, and they are due proper governance at the company. Proper governance is the basis of a modern public company, and Tesla has always played fast and loose with the relationships between its shareholders, boards of directors, and executives. Now, it’s biting them in the ass.
How does it relate to this lawsuit? Yes, Tesla shareholders voted 80% for this $55 billion comp package. 20% of shareholders voted against it. Many people, including Elon, want to stop the issue there. I know it’s tempting, but it’s missing the point of this lawsuit and the judge’s decision completely.
Tesla shareholders made that decision based on the recommendation of “the Independent Members of Tesla’s Board of Directors” in this proxy statement.
The proxy accurately explained how the compensation package worked, but make no mistake, Tesla’s board also was trying to sell the plan to shareholders in that proxy statement. They said things like:
“In crafting this award, we were mindful of Elon’s existing stock ownership levels and the strong belief that the best outcome for our stockholders is for Elon to continue leading the company over the long-term. We created the award after more than six months of careful analysis with a leading independent compensation consultant as well as discussions with Elon, who along with Kimbal otherwise recused themselves from the Board process.”
At the core of the case, the judge had to decide whether or not those shareholders had all the correct information about this plan. If they hadn’t, they would have been misled and would have potentially voted differently.
Now, you might be Elon’s biggest fan right now and might be thinking: “I don’t care if the information wasn’t perfectly accurate, I don’t feel like I was misled, and I would have voted for it anyway.”
That’s fine. I don’t mind that. I don’t wan’t to speak for her, but Judge McCormick probably doesn’t care either. The thing is that maybe other shareholders would have felt differently about it, and you don’t speak for them. It could have changed their vote. It’s as simple as that. You cannot mislead or lie to your investors in a public company. It’s as simple as that.
Now, what was misleading? At the core of it, the judge deemed the board members not to be independent. In short, that would make the entire proxy statement misleading as it is presented as coming from the independent members of the board. After testimonies and depositions from everyone involved, the judge described the problematic relationships like this:
“The process leading to the approval of Musk’s compensation plan was deeply flawed. Musk had extensive ties with the persons tasked with negotiating on Tesla’s behalf. He had a 15-year relationship with the compensation committee chair, Ira Ehrenpreis. The other compensation committee member placed on the working group, Antonio Gracias, had business relationships with Musk dating back over 20 years, as well as the sort of personal relationship that had him vacationing with Musk’s family on a regular basis. The working group included management members who were beholden to Musk, such as General Counsel Todd Maron who was Musk’s former divorce attorney and whose admiration for Musk moved him to tears during his deposition. In fact, Maron was a primary gobetween Musk and the committee, and it is unclear on whose side Maron viewed himself. Yet many of the documents cited by the defendants as proof of a fair process were drafted by Maron.”
Again, for more details, I strongly suggest you read the entire decision. It includes a full chronology of the “negotiations”. It clearly shows that the board operated as a proxy for Elon. The only correct governance guideline they followed was for Elon and his brother to recuse from the board meetings when discussing the compensation package, but they completely overlooked the fact that the chair of the compensation committee was a close friend of both Elon and Kimbal, same for Gracias, who was also on the committee, and they all had personal financial dealings together outside of Tesla.
They clearly were not independent. The only person on the compensation committee who can be considered independent was Denholm, but she was also getting a nice compensation package that made her a very rich woman. So she played ball. Now she is Tesla’s chairwoman and just signed a new deal to sell up to $50 million in shares.
Now, in any decent public company, these conflicts should have never existed in the first place, but at the very least, it should have been communicated to shareholders. They failed to do that. Again, I know that maybe none of that changes anything for you. Maybe you would have voted the same way knowing that Elon and his representative were instrumental in crafting the whole comp plan and he was “negotiating” not with “independent board members” but with friends that he had long-time business dealings with even outside of Tesla.
Personally, I knew most of that, and I voted for it. I didn’t know the depth in which Elon and his lawyer Todd Maron were involved in the process, but I knew that Tesla’s board was far from independent. But regardless, I have to be aware that maybe some of that information would have affected other shareholders, and they would have voted differently.
Based on that, I have to agree with the judge. The vote was not valid because the proxy presenting it to the shareholder wasn’t accurate. It was tainted by Tesla’s governance issues.
What now? Maybe Elon could still get his package? The guy already wasted most of it on a way overpriced Twitter. It would be a shame for him to have to give it back.
Jokes aside, now that the information is out there, I would be fine with Tesla making sure that this information gets distributed to the shareholders and have them vote on it again. I’d be curious to see the results. It might even pass again. I wouldn’t be shocked. I would probably even for it again myself.
I think that Elon did great things for Tesla in the next few years following the adoption of that plan. He gave a lot of time, sweat, and tears to successfully lead Tesla to develop, produce, and distribute the first electric car to become the best-selling vehicle in the world. It undoubtedly changed the auto industry for the better, forever. Is it worth $55 billion? Maybe. Probably. It’s hard to say. But I’m not against it. It’s not like shareholders didn’t get rich along with him – albeit to a much smaller degree.
I don’t think there’s a lot of negative to Elon getting the package, but it needs to be properly presented to shareholders in accordance with the rules of a public company, and it wasn’t. That’s it. But it’s important.
Being successful and getting yourself and your shareholders rich doesn’t make you above the law.
Now, if we talk about Elon getting a new CEO compensation plan at Tesla for his future work at the company. I think that’s different. I would approach that very carefully, as he has proven in the last few years to have a different relationship with Tesla. He is now leading 6 different companies. It’s insane. No matter how you look at this, Tesla has a part-time CEO.
The bigger thing to come out of this situation is that Tesla has a governance problem. It needs an independent board that believes in Tesla’s mission but who are not an old friend or business partner of Elon. We need people who can rein him in when needed.
Like Leo KoGuan, Tesla’s third largest shareholder, said, Elon is running Tesla like a family business. While that might be appealing to some, you simply cannot do that in a public company. Elon’s own reaction to the judgment makes it clear:
There are problems with comments like that because Tesla is a public company whether he likes it or not. Elon’s reality distortion field is powerful but not enough to make that go away.
If Elon couldn’t take Tesla private in 2018, he certainly can’t in 2024. He could barely take Twitter private, and it was worth a fraction of Tesla.
I know that some shareholders are OK with Elon doing whatever he wants with Tesla. It’s sort of like the benevolent dictator theory. Maybe a benevolent dictator would be more efficient than a democracy. It could be, but it’s clear not all shareholders are OK with that and thankfully for them, the rules of public companies are there to save them for dictators.
If Elon thinks he is above the rules of a public company, he shouldn’t be an officer at Tesla. Learn to live with it, play by the rules, or move on.
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Elon Musk isn’t happy about Trump passing the Big Beautiful Bill and killing off the $7,500 EV tax credit – but there’s a lot more bad news for Tesla baked into the BBB. We’ve got all that and more on today’s budget-busting episode of Quick Charge!
We also present ongoing coverage of the 2025 Electrek Formula Sun Grand Prix and dive into some two wheeled reports on the new electric Honda Ruckus e:Zoomer, the latest BMW electric two-wheeler, and more!
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Environment
FERC: Solar + wind made up 96% of new US power generating capacity in first third of 2025
Solar and wind accounted for almost 96% of new US electrical generating capacity added in the first third of 2025. In April, solar provided 87% of new capacity, making it the 20th consecutive month solar has taken the lead, according to data belatedly posted on July 1 by the Federal Energy Regulatory Commission (FERC) and reviewed by the SUN DAY Campaign.
Solar’s new generating capacity in April 2025 and YTD
In its latest monthly “Energy Infrastructure Update” report (with data through April 30, 2025), FERC says 50 “units” of solar totaling 2,284 megawatts (MW) were placed into service in April, accounting for 86.7% of all new generating capacity added during the month.
In addition, the 9,451 MW of solar added during the first four months of 2025 was 77.7% of the new generation placed into service.
Solar has now been the largest source of new generating capacity added each month for 20 consecutive months, from September 2023 to April 2025.
Solar + wind were >95% of new capacity in 1st third of 2025
Between January and April 2025, new wind provided 2,183 MW of capacity additions, accounting for 18.0% of new additions in the first third.
In the same period, the combination of solar and wind was 95.7% of new capacity while natural gas (511 MW) provided just 4.2%; the remaining 0.1% came from oil (11 MW).
Solar + wind are >22% of US utility-scale generating capacity
The installed capacities of solar (11.0%) and wind (11.8%) are now each more than a tenth of the US total. Together, they make up almost one-fourth (22.8%) of the US’s total available installed utility-scale generating capacity.
Moreover, at least 25-30% of US solar capacity is in small-scale (e.g., rooftop) systems that are not reflected in FERC’s data. Including that additional solar capacity would bring the share provided by solar + wind to more than a quarter of the US total.
With the inclusion of hydropower (7.7%), biomass (1.1%), and geothermal (0.3%), renewables currently claim a 31.8% share of total US utility-scale generating capacity. If small-scale solar capacity is included, renewables are now about one-third of total US generating capacity.
Solar is on track to become No. 2 source of US generating capacity
FERC reports that net “high probability” additions of solar between May 2025 and April 2028 total 90,158 MW – an amount almost four times the forecast net “high probability” additions for wind (22,793 MW), the second-fastest growing resource. Notably, both three-year projections are higher than those provided just a month earlier.
FERC also foresees net growth for hydropower (596 MW) and geothermal (92 MW) but a decrease of 123 MW in biomass capacity.
Taken together, the net new “high probability” capacity additions by all renewable energy sources over the next three years – i.e., the bulk of the Trump administration’s remaining time in office – would total 113,516 MW.
FERC doesn’t include any nuclear capacity in its three-year forecast, while coal and oil are projected to contract by 24,373 MW and 1,915 MW, respectively. Natural gas capacity would expand by 5,730 MW.
Thus, adjusting for the different capacity factors of gas (59.7%), wind (34.3%), and utility-scale solar (23.4%), electricity generated by the projected new solar capacity to be added in the coming three years should be at least six times greater than that produced by the new natural gas capacity, while the electrical output by new wind capacity would be more than double that by gas.
If FERC’s current “high probability” additions materialize, by May 1, 2028, solar will account for one-sixth (16.6%) of US installed utility-scale generating capacity. Wind would provide an additional one-eighth (12.6%) of the total. That would make each greater than coal (12.2%) and substantially more than nuclear power or hydropower (7.3% and 7.2%, respectively).
In fact, assuming current growth rates continue, the installed capacity of utility-scale solar is likely to surpass that of either coal or wind within two years, placing solar in second place for installed generating capacity, behind only natural gas.
Renewables + small-scale solar may overtake natural gas within 3 years
The mix of all utility-scale (ie, >1 MW) renewables is now adding about two percentage points each year to its share of generating capacity. At that pace, by May 1, 2028, renewables would account for 37.7% of total available installed utility-scale generating capacity – rapidly approaching that of natural gas (40.1%). Solar and wind would constitute more than three-quarters of installed renewable energy capacity. If those trend lines continue, utility-scale renewable energy capacity should surpass that of natural gas in 2029 or sooner.
However, as noted, FERC’s data do not account for the capacity of small-scale solar systems. If that’s factored in, within three years, total US solar capacity could exceed 300 GW. In turn, the mix of all renewables would then be about 40% of total installed capacity while the share of natural gas would drop to about 38%.
Moreover, FERC reports that there may actually be as much as 224,426 MW of net new solar additions in the current three-year pipeline in addition to 69,530 MW of new wind, 9,072 MW of new hydropower, 202 MW of new geothermal, and 39 MW of new biomass. By contrast, net new natural gas capacity potentially in the three-year pipeline totals just 26,818 MW. Consequently, renewables’ share could be even greater by mid-spring 2028.
“The Trump Administration’s ‘Big, Beautiful Bill’ … poses a clear threat to solar and wind in the years to come,” noted the SUN DAY Campaign’s executive director, Ken Bossong. “Nonetheless, FERC’s latest data and forecasts suggest cleaner and lower-cost renewable energy sources may still dominate and surpass nuclear power, coal, and natural gas.”
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Tesla has been forced to reimburse a customer’s Full Self-Driving package after an arbitrator determined that the automaker failed to deliver it.
Tesla has been promising its car owners that every vehicle it has built since 2016 has all the hardware capable of unsupervised self-driving.
The automaker has been selling a “Full Self-Driving” (FSD) package that is supposed to deliver this unsupervised self-driving capability through over-the-air software updates.
Almost a decade later, Tesla has yet to deliver on its promise, and its claim that the cars’ hardware is capable of self-driving has been proven wrong. Tesla had to update all cars with HW2 and 2.5 computers to HW3 computers.
In January 2025, CEO Elon Musk finally admitted that HW3 also won’t be able to support self-driving and said that Tesla will have to upgrade the computers. 6 months later, Tesla has yet to communicate a plan for retrofits to owners.
Tesla is now attempting to deliver its promise of unsupervised self-driving on HW4 cars, which have been in production since 2023-2024, depending on the model. However, there are still significant doubts about this being possible, as the best available data indicate that Tesla only achieves about 500 miles between critical disengagements with the latest software on the hardware.
The situation is creating a significant liability for Tesla, which already needs to replace computers in millions of vehicles, and it may need to do so in millions more.
On the other hand, many customers are losing faith in Tesla’s ability to deliver on its promise and manage this computer retrofit situation. Some of them have been seeking to be reimbursed for their purchase of the Full Self-Driving package, which Tesla sold from $8,000 to $15,000.
A Tesla owner in Washington managed to get the automaker to reimburse the FSD package, but it wasn’t easy.
The 2021 Model Y was Marc Dobin and his wife’s third Tesla. Due to his wife’s declining mobility, Dobin was intrigued about the FSD package as a potential way to give her more independence. He wrote in a blog post:
But FSD was more than hype for us. The promise of a car that could drive my wife around gave us hope that she’d maintain independence as her motor skills declined. We paid an extra $10,000 for FSD.
Tesla’s FSD quickly disillusioned Dobin. First, he couldn’t even enable it due to Tesla restricting the Beta access through a “safety score” system, something he pointed out was never mentioned in the contract.
Furthermore, the feature required the supervision of a driver at all times, which was not what Tesla sold to customers.
Tesla doesn’t make it easy for customers in the US to seek a refund or to sue Tesla as it forces buyers to go through arbitration through its sales contract.
That didn’t deter Dobin, who happens to be a lawyer with years of experience in arbitration. It took almost a year, but Tesla and Dobin eventually found themselves in arbitration, and it didn’t go well for the automaker:
Almost a year after filing, the evidentiary hearing was held via Zoom. Tesla produced one witness: a Field Technical Specialist who admitted he hadn’t checked what equipment shipped with our car, hadn’t reviewed our driving logs, and didn’t know details about the FSD system installed on our car, if any. He hadn’t spoken to any sales rep we dealt with or reviewed the contract’s integration clause.
There were both a Tesla lawyer and an outside counsel representing Tesla at the hearing, but the witness was not equipped to answer questions.
Dobin wrote:
He was a service technician, not a lawyer or salesperson. But that’s who Tesla brought to the hearing. At the end, I genuinely felt bad for him because Tesla set him up to be a human punching bag—someone unprepared to answer key questions, forced to defend a system he clearly didn’t understand. While I was examining him, a Tesla in-house lawyer sat silently, while the company’s outside counsel tried to soften the blows of the witness’ testimony.
He focused on Tesla’s lack of disclosure regarding the safety score and the fact that the system does not meet the promises made to customers.
The arbitrator sided with Dobin and wrote:
The evidence is persuasive that the feature was not functional, operational, or otherwise available.”
Tesla was forced to reimburse the FSD package $10,000 plus taxes, and pay for the almost $8,000 in arbitration fees.
Since Tesla forces arbitration through its contracts, it is required to cover the cost.
Electrek’s Take
This is interesting. Tesla assigned two lawyers to this case in an attempt to avoid reimbursing $10,000, knowing it would have to cover the expensive arbitration fees – most likely losing tens of thousands of dollars in the process.
It makes no sense to me. Tesla should have a standing offer to reimburse FSD for anyone who requests it until it can actually deliver on its promise of unsupervised self-driving.
That’s the right thing to do, and the fact that Tesla would waste money trying to fight customers requesting a refund is really telling.
Tesla is simply not ready to do the right thing here, and it doesn’t bode well for the computer retrofits and all the other liabilities around Tesla FSD.
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