Two biggest advisory firms urge ‘no’ vote on Elon Musk’s ridiculous $1T pay day
The two largest independent advisory firms, Institutional Shareholder Services and Glass Lewis, have both recommended a “no” vote on the proposed pay package for Tesla CEO Elon Musk, citing many concerns about shareholder dilution and other terms of the plan.
In September, Tesla’s board proposed a stock award worth up to $1 trillion for CEO Elon Musk. It includes several milestones regarding Tesla stock and product performance, each of which unlocks tens of billions of dollars for Musk.
It’s the largest award proposed for any CEO of any company by multiple orders of magnitude – with previous proposed Musk awards holding the second and third place positions as well.
In addition to that much-reported proposal, another proposal is up for a vote which would create a special share reserve of 208 million shares (current value $92 billion) which the Tesla board can give to Elon Musk with no string attached.
Both proposals will be voted on by TSLA shareholders at Tesla’s shareholder meeting on November 6.
There are a lot of details and history behind this proposal which we at Electrek have covered extensively. Most recently, I went over most of the details of the stock award in this article: Elon Musk’s $1 trillion stock award gets more ridiculous the more you look into it.
But now, both of the largest independent advisory companies have chimed in to point out concerns about the proposals in front of shareholders.
ISS and Glass Lewis state concerns with Musk pay packages
Institutional Shareholder Services (ISS) and Glass Lewis are “proxy advisory” companies, both of which who do research and analysis of company proposals and then make recommendations to shareholders about how to vote for them.
Company boards often have their own recommendation on an issue, which may or may not be the best for shareholders – especially if those boards are lacking in independence, and may make recommendations that favor management personally over shareholders as a whole. So, it’s important for independent outside advisors to have a look at proposals and give their take.
Proxy advisory firms are generally less interested in the specifics of what industry a company is in, and just want to ensure good corporate governance – independent and diverse boards, appropriate executive compensation, and so on.
These recommendations are often followed by institutional investors – banks and other large companies that hold large chunks of shares in many companies, many of which they won’t track deeply. So they hire advisory firms to help them make decisions on votes.
ISS and Glass Lewis combined make up the vast majority of the proxy advisory market, so when they make recommendations, it can sway a lot of votes.
And, in looking at the proposals in front of Tesla investors for this year’s shareholder meeting, both of them have stated significant concerns.
On Friday, ISS stated that while it recognizes Musk’s “track record and vision” and the board’s intent to retain him for those reasons, the pay package “locks in extraordinarily high pay opportunities over the next ten years” and “reduces the board’s ability to meaningfully adjust future pay levels.”
It also pointed out that the proposal is designed in such a way as to allow extremely high pay for Musk even if most milestones aren’t achieved, and stated that its “astronomical” size would dilute shareholder value and voting rights.
Glass Lewis’ recommendation counters Tesla board on most proposals
Electrek obtained a full copy of Glass Lewis’ report, but not of ISS’.
Today, Glass Lewis echoed ISS’ statement, saying that dilution to shareholders “warrants significant concern.” It recommended shareholders to vote against all three pay-related proposals (2, 3 and 4), and to vote against re-election of board members Ira Ehrenpreis and Kathleen Wilson-Thompson, though it did recommend voting for the re-election of Joseph Gebbia.
Glass Lewis calls proposal 3 “particularly concerning,” as it ties a 208 million share award for Musk to the creation of a pool of 60 million shares for all other Tesla employees combined, and notes that the employee pool is only necessitated by the board’s previous action draining the pool of shares for employees and giving them all to Musk. It suggests that shareholders vote down this proposal, and that the company put up a separate, clean proposal to refill the employee pool.
And proposal 4, the $1 trillion award, is noted as being excessively dilutive for current shareholders and allowing too much concentration of ownership into Musk’s hands, along with producing more “key man risk” for Tesla. Glass Lewis states that attaching Tesla’s future so inextricably with Musk’s is risky, given his “vast and varied interests,” and suggests it would be reasonable to “sets parameters that limit the key man risk to which shareholders are exposed,” which the company has chosen not to do.
It also notes concern over promising billions of dollars of awards to Musk for doing some of the most basic things that a CEO is meant to do, such as developing a succession plan. Shareholders should “reasonably be concerned that the committee feels the need to compel Mr. Musk to perform such duties, particularly at such cost to shareholders.”
The milestones involved in the award are noted as potentially being easy to achieve, particularly given that the board can decide on a whim to grant a tranche of stock even if a product milestone isn’t reached, if market realities have changed between now and then (a “covered event”) resulting in those product milestones becoming unrealistic. The board is given significant discretion in this matter.
Finally, Glass Lewis points out the danger of allowing Musk to vote his entire ownership stake in favor of his own pay, which was not the case in the last shareholder vote over Musk’s pay. This means essentially a free 15% head-start on the vote, due purely to Musk’s own shares. Glass Lewis cites surveys of its clients and others, stating that a majority of both shareholders and non-investors think that executives should not be able to vote on their own pay packages in stating that Musk’s ability to vote on this proposal does not align with market expectations.
Glass Lewis also stated its concerns with a proposal for Tesla to invest in xAI. xAI is a private company which Musk started started to compete with Tesla (and is currently subject to a lawsuit for that reason). Glass Lewis said that this matter should be decided by the board, not shareholders.
In sum, Glass Lewis’ recommendations ran counter to the Tesla’s board recommendation in almost every case. The only proposals they agreed on are the election of Gebbia, ratification of Tesla’s auditor, and proposals 8 and 9, two shareholder proposals recommending Tesla adopt standards on sustainability and child labor.
Tesla responds by lashing out with attacks
Tesla has, expectedly, responded with attacks against both firms.
Both ISS and Glass Lewis have recommended “no” votes on Musk’s pay packages in the past, citing similar concerns over their size and the amount of dilution which they would cause to shareholders. And Tesla has spoken out against the two firms in those instances.
In this instance, Tesla attacked ISS, suggesting that its status as a disinterested advisor (which does not hold shares in the company) somehow makes it less capable of seeing the reality of the situation. It also notes past shareholder votes on other proposals, which were different from the proposals on the table today.
And after Glass Lewis’ recommendation today, Tesla levied another attack, making similar points about votes on past proposals, rather than the proposals in front of shareholders today.
Separately, Tesla also attacked a group of pension funds which are invested in TSLA, mocking them for having returns of 7-13% (which, collectively, is above average for large stable funds). Tesla even hired an outside PR company to publicize this attack.
Electrek’s Take
We’ve been clear here, over and over, about how ridiculous this stock plan is.
However, despite it seeming ridiculous at first glance, it only gets more ridiculous the deeper you look into it.
I went over it all this weekend in the article mentioned above, Elon Musk’s $1 trillion stock award gets more ridiculous the more you look into it. It’s long, but if you want more detail, that’s the place to go.
In short, the analyses presented by these outside firms looking at Tesla’s shareholder proposals, and the environment around them, are clear-headed and made in the interest of Tesla shareholders. If shareholders actually read the letters or analyses involved with their own interests in mind, they will likely be persuaded.
Meanwhile, Tesla’s responses have been filled with the sort of language that someone would expect out of an entity that is trying to deceive – the sort of language we’ve gotten used to in our politics. They read as campaign messages or advertising efforts, not as the result of deep analysis. And Musk also threatened his own company just yesterday, once again, in the hope that shareholders will feel trapped enough that they vote to retain him.
If the only place people read about this is on twitter, which Elon Musk bought for the purpose of spreading his own propaganda and shutting down dissent, they might get one sense of what the proposals mean. In that upside-down world, TSLA investors can only benefit as the stock goes up, and Musk only benefits if the stock goes up.
But looking into the actual details of the proposals, it becomes apparent that Musk can get awarded with a larger payday than any CEO ever for doing nothing at all, that that award comes at the cost of every other Tesla employee and the voting rights of every Tesla shareholder, and that better options are available which would maintain the rights of Tesla investors while also compensating its CEO (whose performance has been exceptionally bad recently).
But those options have not been provided to shareholders to vote on, as Tesla’s board is working more in the benefit of their friend Elon, rather than the benefit of TSLA shareholders as a whole.
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Following on the heel’s of last month’s major leak of the design of Rivian’s secretive ALSO e-bike, now we’ve just gotten a much better look at the upcoming entry to the US micromobility market. And it’s a doozy.
Our previously best look came in the form of blurrier images that were mistakenly left in a marketing video prepared by the company’s social media team.
But thanks to an eagle-eyed reader who spotted the yet-to-be-released e-bike on the Caltrain yesterday morning (hat tip to Adem Rudin), now we’ve got a great view from the expensive seats, barely two days ahead of the anticipated official reveal.
The bike looks to be a test mule based on the extra engineering hardware and the missing shroud covering the wiring run on the front of the battery case. There appear to be several sensors mounted to the bike, including an expensive triaxial accelerometer on the side of the battery and some piece of diagnostic hardware strapped to the downtube.
But otherwise, it looks like the real deal and matches the several different angles we saw in blurrier form in my previous leak.
Now we have a great view of the front fork, which is confirmed to be an inverted fork. Fascinatingly, it has structural bosses for mounting a front rack, and we can see the orange cargo box employed on that rack for gear hauling duty. That’s likely a custom-designed fork, as I’m not aware of any other cargo forks of this style currently on the market. It’s also a bit of a strange choice. It certainly adds to the utility of the bike, but most e-bike manufacturers have moved to headtube-mounted racks for better stability. A fork-mounted rack swings with the handlebars, meaning heavier loads will change the dynamics of the ride, reduce the front-end handling, and can even lead to dangerous oscillations under the right (or wrong) conditions.
Moving further down, we can clearly see a tone ring built into the front disc brake rotor, which is a giveaway that the bike will feature anti-lock braking (ABS), or at least front wheel ABS. Front-wheel ABS would be a major safety upgrade and is rarely found on bicycles. Between the inverted front fork and the ABS tone ring, the front end of the bike looks more like light motorcycle gear.
The front and rear racks point towards fairly obvious utility intentions for the bike, though the full-suspension and Kenda El Capo tires seem like they belong more on the dirt trails than the bike lanes. It’s a strange mix, but perhaps the tires were just temporary replacements on the test mule. Full-suspension, while more common on off-road bikes, can still be a major upgrade for an urban commuter. We’ve seen it on premium models from companies like Riese & Müller, though also with incredibly premium price tags.
We’re also getting our best look yet at the battery, which seems to be a removable unit that slides in from the side of the bike. It takes up a big portion of the central frame area, whose panels also likely cover a mid-drive motor and the bike’s speed controller, among other critical electronics. We can also see now that the belt drive is a Gates center-drive system, one of the most premium belt drives out there for bicycles (not to mention that Gates is the belt drive maker of choice for high-power electric motorcycles like those from LiveWire and Zero).
The rear suspension is still shrouded and we don’t get a great look at it. However, we can see some linkage and it may be a four-bar setup – again pointing to the sophisticated engineering that went into designing this frame.
The handlebars appear to support button clusters on each side, though we can’t see what functions they might offer. It’s not clear if there are any shifters or if the bike is a single-speed, and we also don’t see a throttle, though it could be a thumb throttle that is obscured from view. The grips appear to be single lock-ons, so I don’t think we’re looking at a full-width twist throttle like you’d find on a motorcycle.
The mirror and the sumo wrestler bike horn are presumably the test engineer’s add-ons, though we can’t rule out for certain that ALSO riders will get their own mostly naked audio warning device.
What else can you see on the bike that I missed? Let me know in the comments below!
Electrek’s Take
I guess the unveiling was only two days away when this photo was snapped yesterday, and I had already spoiled a blurrier look at the bike last month, but I’m surprised they’re just parading around the yet-to-be-officially-unveiled bike in public like this. Back when Mike Radenbaugh was running the show at Rad Power Bikes, he used to personally ride upcoming bikes and camouflage them with cardboard or other concealers to make them look like any other beater city bike. So I’m surprised more effort wasn’t put into obscuring what is obviously a very unique-looking bike.
I’m glad to see more details here and it’s interesting how much investment was put into the bike’s hardware. Other than a few catalog parts like the tires, wheels, brake levers, etc, nearly the entirety of the bike appears to be custom-designed and produced for ALSO. Even for off-the-shelf parts, they went with a lot of high-end stuff. The tires and the water bottle holder are the only cheaper things I can see (mirror and sumo horn excluded). Features like ABS aren’t cheap. And it’s not clear if there is a gearbox in the mid-drive motor, but I would assume so since a single-speed would be unmarketable at this premium level. All of these features point to a bike that probably has very high performance – perhaps almost as high as its invetiable price tag.
And therein lies the rub. It’s shaping up to be a great bike, but also one that very few people will be able to afford. Or even for those who could afford it, it may be difficult to justify all the extra features and tech when, at the end of the day, it still goes just as fast and as far as all the $999 e-bikes out there. I’m not saying that’s the right way to compare it, but I am saying that’s how it WILL be compared. The simple fact of the matter is that there are few e-bike markets that are more price sensitive than in the US. Americans have become used to getting more affordable Chinese manufacturing for years, and lately they’ve seen how good that cheap manufacturing has become on pretty darn decent budget-priced electric bikes.
So will Americans pony up what will probably be 3-4x the price of a budget e-bike for one that has full-suspension, ABS, and very likely some cool connectivity-based features? Time will reveal the answer.
But let’s just say, I’m not yet convinced.
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Environment
Spiro raises massive $100M to supercharge Africa’s battery-swapping electric motorcycle revolution
Spiro, the fast-growing electric mobility company based in Africa, has just secured a historic US $100 million funding round – marking the continent’s largest-ever investment in two-wheel electric transport. And if you haven’t been paying attention to the battery-swapping boom across Africa, now might be a good time to start.
We’ve seen battery-swapping take off around the world, with leaders like Gogoro in Asia, Swobbee in Europe, and Vammo in South America, all demonstrating the effectiveness of swappable battery networks for major two-wheeler markets. But don’t count Africa out, either. Spiro has spent the last few years building up its own homegrown battery swapping network for its locally-built electric motorcycles, and is now set to jump-start that impressive growth with a mega funding round.
The impressive fundraising round was led by The Fund for Export Development in Africa (FEDA), the impact investment arm of Afreximbank, which contributed US $75 million. The funding will allow Spiro to dramatically scale its fleet of electric motorcycles and expand its already impressive network of battery-swapping stations across the continent.
Swapping gas for watts
Spiro’s model is simple but powerful: affordable electric motorcycles backed by a vast battery-swapping network that eliminates the wait time and charging infrastructure hurdles that typically slow down EV adoption. With over 60,000 electric motorcycles already on the road, more than 1,200 battery swap stations, and 800 million kilometers of low-carbon travel already under its belt, Spiro is building what it claims is Africa’s largest clean two-wheeler ecosystem – and it’s growing fast.
In fact, the company expects to deploy over 100,000 vehicles by the end of 2025, representing a 400% increase year over year. It’s a lofty goal, but Spiro’s rapid growth over the last few years demonstrates that it’s still attainable.
“Africa is at an inflection point in personal mobility. Riders are rapidly shifting from internal combustion motorcycles to Spiro’s more affordable and accessible battery-swapping ecosystem and motorcycles. For the first time, riders are embracing sustainable transportation because it performs better, costs less to operate, and offers greater profitability than traditional gas-powered vehicles,” said Kaushik Burman, Spiro’s CEO. “This is just the beginning – we’re just getting started.”
I had the chance to speak with Kaushik last month, where he explained to me how a big part of Spiro’s success is helping motorcycle taxi riders – the majority of its customers – achieve a higher standard of living by becoming more profitable with electric motorcycles over gasoline-powered motorcycles. The bikes aren’t just cheaper to purchase, but significantly cheaper to operate, meaning riders can as much as double their daily take-home pay. With that kind of economics, it makes sense why Spiro is seeing such high demand for its motorcycles and battery-swapping network.
More than motorcycles
While Spiro’s bikes are the vehicle – literally – for this transition, the real secret sauce is the swapping network. Riders don’t need to charge at home or wait around for a plug. They just pull into a station, swap out a depleted battery for a fresh one, and get back on the road. It’s a system that’s already proven effective in other regions around the world, and Spiro is now proving it can work at scale in Africa too.
The investment here is also about more than just clean transportation. According to Professor Benedict Oramah, president of Afreximbank, it’s part of a broader push to boost intra-African trade, create local manufacturing jobs, and reduce dependence on imported, second-hand gas-powered vehicles.
“We are delighted to partner with Spiro on this transformative initiative,” said Oramah. “Together, we are laying the groundwork for a new era of intra-African trade and industrialization by stimulating local vehicle manufacturing, strengthening regional integration, and enhancing trade flows.”
Made in Africa, for Africa
Founded in 2022, Spiro is leaning into local production as part of its growth strategy. The company has assembly facilities operating in Uganda, Kenya, Nigeria, and Rwanda, with new pilot programs now underway in Tanzania and Cameroon.
This latest funding builds on more than $180 million already raised from backers like Equitane and Société Générale, further underscoring investors’ confidence in Spiro’s model.
“Spiro’s rapid expansion into new markets demonstrates the immense appetite for clean, affordable, and efficient transport across the continent,” said Gagan Gupta, Chairman of Equitane. “With FEDA’s support, Spiro is exceptionally well positioned to scale even faster.”
Electrek’s Take
While most electric motorcycle battery swapping headlines are dominated by Europe, the US, or China, this is a powerful reminder that Africa is carving out its own lane – and it’s doing it with a smarter, scalable approach that solves local problems in local ways. Battery swapping may not be the answer everywhere, but it’s proving to be a perfect solution in dense urban areas where fuel is expensive and charging access is limited.
And if Spiro hits that 100,000-vehicle goal next year? Well, don’t be surprised if Africa ends up leading the world in practical, everyday e-mobility adoption. After all, doesn’t a 100 kg electric vehicle make a lot more sense for a quick taxi trip than a 2,500 kg one?
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