Tesla Shareholder's BIG VOTE: Elon Musk’s Pay Plan & Texas Move w/ Alexandra Merz
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Hi, it's Dave. Welcome. It's been quite a while since my last interview and last video here on YouTube, but today I'm happy to bring Alexandra Merz. She's been a longtime Tesla shareholder and an advocate of many shareholder issues, especially on X.

And so I wanted to bring her on my show to talk about this important next week shareholder meeting by Tesla, but also to explain kind of why people's votes matter and what's at stake for Tesla and for Elon Musk. So, Alexandra, welcome on the show. How are you doing? Hi, Dave. Great. And very privileged to be the first one after your break. So yeah. Yeah. Thanks. I think we met in person about a year ago. I wish we could do this interview in person. Yeah.

But are you in, is it in California, Santa Barbara? Yeah, Santa Barbara. Okay. Yeah, it's one of my favorite cities actually in the US. Fantastic. Very cute. I remember when you tested FSD a year ago here. You actually came to Santa Barbara, right? Yeah, tough roads, tough, tough roads in Santa Barbara. It is, it is. I think that's why so many love testing it here. Exactly.

So let's dive into the shareholder meeting next Wednesday. Someone this morning just reached out to me on Twitter saying that they're going to invite me as their plus one. So I hopefully will be there. Yeah, so what about the shareholder meeting is important? I think we have the two biggest issues is Elon Musk's

Musk's re-approving of his compensation plan, his 2018 compensation plan, and then Tesla moving their incorporation to Texas. So can you break down these two issues? Let's start with the 2018 Elon Musk compensation plan. So why do shareholders need to vote on this and what's at stake with this issue?

Okay, so the whole scenario only came up again because beginning of this year, I think it was end of January, beginning of February, a judge in Delaware actually gave a preliminary judgment in a case where a nine share shareholder pretended that in 2018 he wasn't informed enough to make an educated decision on this point in 2018. And the judge

the judge's preliminary judgment pointed to formalities that were missing in 2018. And that was her reason for saying it has to be re-voted, it has to be reinstated if really we want to have this. So,

Tesla at that moment had a couple of options, but as shareholders, and I want to give a shout out to Amy Steffens here because she was pushing me to start that in February, Tesla shareholders reached out to the judge. There were 1,388 letters

just now published by the judge that were sent to the judge in February and March saying, look, there was one shareholder that had one opinion, but here are all of us who have a different opinion, close to 200 emails as well. So, but at the moment, this judgment is still in limbo because they're still discussing what the plaintiff's attorney's fee should be. So that is still going on and will go on for about two months until beginning of July.

So the board then in March decided, and we know that because they documented it very well in the new proxy, the proxy is the agenda for the shareholder meeting, the board decided that

they will listen to the shareholders. More than 6,000 shareholders had followed our call to fill out a survey on SurveyMonkey with all their information, the number of shares they were holding and all that, and saying, we want the board to reinstate, to revote this and to reinstate the compensation package. So the board listened to that recommendation. There are a couple of other options they had.

but they took this option as first because that will allow to reinstate exactly the same package that was in place then. And so that decision was taken and parallel they also decided they will vote and it really is linked to each other on that re-domestication to Texas.

So in the period between March and end of April, the board decided that those are the two major items on which we're going to vote. But there are a couple of others. One is the new term for Kimball-Musk.

and for James Murdoch to be directors of the board. And another one is to reappoint PricewaterhouseCoopers as the auditor. And then there are a couple of minor issues that are also up for vote. In total, it's about 12 points that we're voting on. Got it. So, okay, so let's dive into, I guess, why is the Texas issue? Is it related to the compensation plan at all? And if so, how?

It is. So once the judgment was out, Elon was very quick on X to say, that's it. We've had it with Delaware. We're moving out of Delaware. Now he doesn't actually have that power. He's the CEO of the company. He's a board member, but he doesn't have the power to decide that. This is a public company. So the board had to make a decision what to do now with this information. So they had to build the whole business case on whether Texas would really be an intelligent choice or

Obviously the headquarter of the company, but that doesn't mean that you have to have the legal entity in the same place where you have your headquarters. So they're laying out in the proxy over

dozens and dozens of pages. It doesn't stop why Texas is a good place to go. They initially started off with the 50 states in the United States, cut it down to about 12 that came in closer consideration, then brought it down in the end to a comparison between Delaware and Texas. And at the end of that comparison, you will see there are lots and lots of reasons, fiscal reasons, legal reasons, whatever that they went through. I mean, this should be obligatory

lectures in business schools. This is incredible to what point this has become transparent and worked through. So by doing that, the board in the end decided that they put in place a special committee who was just charged with this question that yes, they want to bring this forward as a vote. They do recommend that we move to Texas if we can. It's a very difficult, steep vote. We'll get to that in a moment. But if we get to Texas, that would mean that

Any legal issues from Tesla in the future will be brought forward to Texas courts and that they feel more confident with that. And they also clearly stated that they're currently not working on any new compensation plan until the moment that really it is in Texas. So, yeah.

And it's clearly linked. They want to make sure that whatever happens with the 2018 compensation package, it may not pass. But that is still a Delaware issue because that is going to be relitigated in Delaware. Again, a second, completely independent new procedure. If ever we get to a majority vote next Thursday, it is not that just because we voted.

that it is reinstated. There will be necessarily at least one if not two more procedures in Delaware. They're called a 204 ratification procedure and there's probably going to be opposition because the plaintiff's attorney from the Tornetta case already said he's going to oppose it. And then it goes into what is called a 205 procedure. So obviously we need to have first a majority stake until we get to those, but it's not an immediate relief of the problem. And then

But that is all Delaware. But what they want is then close the Delaware cases, do an appeal of the current case still in Delaware, but then move to Texas and start all over again with a clean slate. Got it. So I'm guessing like the Texas issue is more for the new compensation plan for Elon Musk if he decides to

release one and for future issues. They just want a safer place to operate. For his existing 2018 compensation plan, which is in limbo right now, if shareholders, if

on next Thursday, there's over a 50% vote and shareholders re-approve this 2018 compensation plan, then is it pretty much like, I want to say guaranteed, but then it's very, very likely then you would pass through the extra procedures. Is that correct in Delaware? I wish. I wish. If we would have a neutral code in Delaware, it should be.

But that doesn't seem to be the case. Nobody expected this current case to end up how it is ending up. So it will most likely end up with the same judge. This has been the same judge that has litigated the Twitter purchase and now this case. And she is the head of the Chancery Court, so she can decide which cases she takes. And she seems to be very motivated to take always Elon's cases.

Normally the 204 procedure is really more formal than anything. There is not much content to it. Shareholders vote as long as you can prove that it was a fair and legal vote. It usually goes through. I don't expect it to be easy. Now the objections the plaintiff's attorney can bring forward

sound ridiculous to me. What we've heard so far from a couple of his friends and councils that came out was this whole issue. I'll explain this in two seconds because it's absolutely ridiculous. It's worth thinking about it. This vote should be a vote that would necessitate 100% because they're 100% of votes. Their reasoning being, well,

If we now reinstate the package, we have to pay, well, is it now 41 billion, 56 billion? It all depends on the share price, obviously, by the time it will be exercised. But let's just say 56 billion because most people are familiar with that number. So with the 56 billion, they consider those 56 billion actually waste. So there's a whole precedent in Delaware about how waste and presents should be, gifts should be treated.

And they always need 100% of the casted votes to agree that we are gifting things or that we're wasting things. So why do they consider it waste? Because they say, well, the work has been done. We don't need to pay him retroactively.

which is obviously for me exactly the wrong reasoning. There was a deal, then he made, and then he did the work. And so, yes, he should be paid for it. Their reasoning is, well, he did the work. Why, if we now pay him, that's actually wasted money. And so it needs 100% of costed votes. I don't think that will fly. I don't think Delaware really wants to go there to become so anti-entrepreneurial because Delaware, I mean,

industry is mainly legal. It's become this state where people domicile their companies and there are just roads and roads of lawyers litigating all these companies' issues. Whatever you do in Delaware, you need a representative lawyer in Delaware. So there's a huge business. If the judge

in the end is seen and she's not just any judge, she's the head of the Chancery Court. So it's not as if just there's one minor judge being complicated. No, she is really important in this field. Above her is only the Supreme Court directly of Delaware. There is not much more to rectify whatever damage she may do to the reputation of Delaware.

Got it. All right. So let's recap the situation here. So next Thursday, we've got a shareholder vote. Shareholders will be voting on whether to ratify, re-ratify the 2018 Elon Musk compensation plan. If they do with a 50% or greater vote of the votes that are casted, then we'll have a lot of momentum to hopefully push through the rest of the procedures in Delaware. And then hopefully this case will be closed. If

shareholders vote to move to Texas, the Tesla entity, then that gives more confidence for the board to give a new compensation plan, hopefully to Elon Musk. Explain why this Texas vote is a lot harder to achieve, let's say, than the other votes. This is difficult to accept for anybody who wants to vote for Tesla and who is interested in this subject.

It all comes back to another case, which is the TripAdvisor case. TripAdvisor also wanted to leave Delaware a couple of months ago, short years ago. And then they also had a small shareholder opposing a vote that had approved moving out of Delaware to another state. I think in their case it was Nevada, but don't nail me on that. I just know a couple of important things for us.

And so when the opposition was brought forward to a judge, and it was not the same judge, it was another judge in Delaware. The issue was that the TRIP Advisor founder had a huge chunk in TRIP Advisor and the cost of votes were relatively small. So his portion of

his votes into this question, can we re-domesticate somewhere else, were more than 50% of the casted votes, just because it was low turnout of votes and he still had a big chunk. And so that was the main argument of the opposing plaintiff.

and the judge said, well, there we have an issue. So for this question for TripAdvisor, but that now suddenly becomes precedent for every other re-domestication case out of Delaware, we will have to do a double condition. We need to have

that at least 50% of all outstanding shares voted for this re-domestication and there the founder and owner can, because the interest party can vote because it's of all outstanding shares. And the second condition is of all costed votes, we need 50%, but there the founder owner cannot vote.

And so this gave this double standard. And like I said, a couple of long months ago, but short years, and now suddenly we're stuck with this precedent until there may one day be another one. But in the current situation, that's what Tesla has to prove as well. So it's obviously one thing for a relatively small company

market cap like TripAdvisor, it's a completely other situation for Tesla. And why is it a different situation? Well, first of all, Tesla is the company with the most retail investors. We have more than 10 million retail investors all over the world. So that's where, you know, I became very active is last

these last weeks, the usual company has maximum a million retail investors. And here we are with 10 million. So you need to motivate these people. They need to understand they have to vote, but also they need to be able to vote. We're probably getting to that in a second. And the other thing is, obviously, we have 3.2 billion shares outstanding. So

That means 1.6 billion have to be for yes, Elon and Kimball can vote. So that's 430, if I remember right. But that still needs more than 1.1 billion positive votes for the re-domestication. And that's just, I mean, a very steep hurdle. I'm wondering, like, how many votes, what percent of shareholders usually vote, let's say, in a shareholder meeting, let's say, for a company like Tesla? Are there any numbers out there? It's very difficult to actually know.

Yeah, I mean, we do know, and I could have done more research into that over all the years, but I only did it for 2018.

In 2018, about two thirds voted, but the two thirds was from a shareholder base that was 70% institutionals. And institutions, obviously I keep to do that either they do it themselves because they have the manpower to have a group of people looking into these votes, usually what's called a corporate action department, or they use these famous proxy advisors, right? So institutionals,

have more or less a duty to vote and they actually have to publish it a couple of months later with the SEC. So we actually know what they voted. So in 2018, the investor pool for Tesla was 70% institutionals

and 30% retail. And with that mix, the total number of participants was about two thirds, 66%, right? So I have to, I mean, obviously I have no details, but my gut feeling tells me that retail investors were not, you know, voting a lot because we had such a strong institutional share. This time it's completely different. For the...

If we include Elon and the insiders, we have about 14, 15% of insiders. We have about 40% retail and we have about the rest of 47 or 48% is an institutions.

So it is much more balanced. And if we take the calculation where Elon and Kimball cannot vote, we are 47 and a half percent retail and 52 and a half percent institutions. So again, I think the institutions will vote at least most of them. We're about 3,300 institutions invested in, in, uh,

in Tesla. But the tough part was these 10 million, 47 and a half percent retail investors for the costed votes without Elon. That was the pain point where things could happen because the retail investors are very favorable to Elon, to Tesla. They understand what's happening. They're into this, but they needed to be able to vote.

Got it. For the institutions that, let's say, have casted their vote on Elon's compensation plan already, there was this graphic that came out where it had several of the large institutions voting against it. Have there been any updates where we know where the institutions stand? No. We don't know for 2024 any decisions at the moment, and we will not know for quite a while. I guess Tesla knows them, but we don't know them. A couple of indicators we liked, for example,

Elon now following the CFO from BlackRock. That helps us. That's 5.5%. So, you know, there were a couple of signs. I told people who had accounts with Fidelity or Vanguard or whatever to write to them. Everybody only got standard answers. We're not answering to that. We're not whatever.

The good thing, the silver lining of ESG brought with it that a couple of the fund managers of the institutions actually delegate now you can get back your voting right for equity index funds, notably with State Street. So we made sure that any State Street equity index fund investor knows that they can go back to State Street and say, don't vote for me, I'm going to vote directly, give me my voting power.

And so they were, and one of the options they had was just to vote for the board recommendations and then State Street would execute that. State Street is the most advanced for that. They do that for 80% of their equity index funds. Vanguard does it for five funds, but that's it. Fidelity doesn't do it and Joe doesn't do it. So there are many others who just don't give that away, nor do they discuss anything. And all we will know is in a couple of months how they voted when they have to fight it with the SEC.

How much do you think Tesla's board knows what's going on with the vote? I'm guessing they have info from the proxy companies, but do they have any other type of insights on where the board is lining up? I do believe so. The company that is doing everything that's electronic proxy vote is Broadridge. Everybody that voted on proxyvote.com, the company behind that is Broadridge.

And Broadridge, if you go on their corporate side, not on the proxy board side, but how they pitch for new clients, because this is a competitive business. There are other proxy enablers. I don't know how you want to call these companies. But they have to be quite transparent of the services they propose. And so one of the services that Broadridge proposes, who is actually one of the more expensive of these companies, is to have real-time access to what's happening.

Now, you have to know that proxy votes on these platforms can be changed until the day before. So in our case, June the 12th. So you may be updated, but until June the 12th midnight, you don't have definite results. But you certainly have tendencies. And so that's the first block. The second thing is that they did mission, and apparently it's now 100 people.

people team, a proxy soliciting firm proxy solicitors, they're called I ignored until four weeks ago that this profession existed. So here we are. And so this is a company it's called in his I think in his field is the name in New York, who is helping going through the large

retail investors in Tesla and contacting these people if they see they haven't voted yet. So they're really actively working with these people, helping them to find their proxy links or papers or whatever they want to vote.

and they now spread out to their uk branch in london and that branch is helping actively with all europeans who have issues voting which is actually much bigger the issue is much more overseas in asia and in europe than it is in the us in the us the investors are first of all the banks are better equipped and the investors are probably much more used to this so um

So I think Innisfil and Broadridge give them valuable information on the retail side. Then on the institutional side, I know, or we know through Financial Times articles and this morning's CNBC interview of Robin Denholm, that board members are traveling around the world, visiting the big institutions. So I do believe that

In those discussions, some of them may pledge what they do. We also knew in the proxy, it was stated that four of the 10 biggest institutions have said that they will support both the Comp Package and the move to Texas. So we already know that there is some support. I think BlackRock was not there yet. So if we now add BlackRock, it starts, you know,

it starts making sense that we will probably have 50% of casted votes. I'm quite comfortable predicting that. 50% of outstanding is a much higher bar. Got it. So how close do you think the votes will be? So with the Elon Musk compensation plan, but also with the Texas reincorporation? Yeah, that's a good question.

very difficult for me to to see. I can obviously, you know, living in the bubble of next, you feel that everybody is for it. And then you have the ten clowns of this world who are against it. They're quite vocal, but it's always the same crowd. So that gives you a false sentiment of of comfort. And then when when I started working the last three, four weeks on helping people find ways to vote because their banks weren't cooperative or whatever, there were issues.

I realized that there are so many people out there that never heard of this. They didn't even know what proxy voting is, leave alone that there is a shareholder meeting upcoming and there were important issues and whatever. So the level of, I don't want to call it ignorance, but the level of people not even knowing that the issues exist is much higher than I expected. So in my view, I think of casted votes for the comp package

60 plus percent seems possible. Okay, I'm quite confident we get the 50% and I'm optimistic around 60%. Texas, if we get to 50% of outstanding, that will be the victory of the year. But let me say it, I'm not going into that meeting expecting that because the Texas vote, this vote has taught us so much on

you know, how difficult it is to reach these investors, but also how difficult it is for these investors to vote, that the next six, 12 months must be used by the investors and by Tesla and by us who are vocal about it to educate people moving to other brokers or working with their banks to make sure that next time they are ready for it.

because this Texas vote can be represented as many times as we want to. So if the second that Tesla feels they're comfortable on now having educated enough and people being more educated how they can vote, I'm sure they're going to bring it forward a second time and if needed even a third time. And the other thing is maybe in Delaware that precedent from TripAdvisor

may be overruled, right? Because it could very well be because there's so many other companies that want to move out of Delaware that there's a Spotify case currently and there are a couple more that, you know, it may just be that precedent, which seems very harsh. And I understand where it comes from in that TripAdvisor case, but it's just very harsh for bigger companies that that may be overruled and it becomes easier. Yeah. I mean, it does seem overly harsh. I mean, it would seem in my opinion that, you know,

you leave it up to the company's bylaws and their rules of where they want to incorporate and how to change that based upon shareholder vote. But for Delaware to say, hey, it has to be on all votes or all the shareholders standing, that's pretty harsh. So if Tesla loses the Texas vote,

and they want to bring it up again, do you think they'll wait till next year's shareholder meeting or will they have another kind of vote in between? - I think it could be earlier than that. It is now a matter of, oh, no, sorry, let me just go back. In my view, the Texas re-domestication is the most important item on that list. For Elon's compensation package, there is a plan B, C, and D.

But all of these would be easier if we're in Texas. And so the Texas re-domestication has to be consumed at one moment. Both Elon and Tesla have leaned themselves out of the window too much, making clear they don't want to stay in Delaware anymore. At the same time, Delaware doesn't want to make it easy for Tesla because Tesla is now the example. The whole world talks about leaving Delaware.

because of Elon and Tesla. So, because nobody heard of those earlier cases, right? Everybody, even us investors who are very close, nobody heard about the TripAdvisor case before, the Spotify case before. So Delaware is gonna make it difficult, but once we're gone, we're gone. And then this whole difficulty, this whole legal difficulty there is just gonna go away with it. So the...

The question is, and they will have the detailed data, is are we missing a lot of retail investors? If we're missing a lot of retail investors for that vote to get to 50% plus one vote, then the work has to be on how do we get these retail investors on board?

Do we have to work with the banks so that they also idea because the banks have to pay to use Broadridge as well. And Broadridge is one of those companies that take money from all sides. So, you know, you have to help, you have to understand. And I think the understanding today is much better than four weeks ago. Where are the huge clusters of investors? They are in Norway, they're in England, they're in Korea, they're in Japan, they're in Germany.

who can currently not vote, who had issues voting. And for about half of those people or even a little bit more, we could find temporary solutions. We name-shamed them to the point that suddenly they could, right? But it's not a permanent solution. They're all saying, "Oh, we did this from once, but not sure we can do it again."

So Tesla has to work with these people to make sure that they are motivated. And again, why is it Tesla that has to do something that's actually an industry standard in the banking world? Because Tesla has 10 million retail investors. Nobody else has 10 million retail investors. So that's where it all comes from because the mass is 10 times bigger than for any other company. And Apple can very well live without the retail investors. GM has 10% retail investors. Nothing.

So the fact is that there's just such a huge mass of retail investors, which is a strength, but it's also a burden.

Got it. All right. So let's entertain the downsides or if things don't work out. So Texas, we might be able to, Tesla might be able to put another shareholder vote out. Who knows? Let's say six months after or next year or whatever, after seeing who voted, trying to figure out a better strategy on how to get more votes casted. Let's say Elon Musk's compensation plan for some reason gets less than 50%.

of the casted votes on Thursday. So what are these plan B, plan C, plan D options after that point? - Yeah, well, one is to do, the board does a new package in Delaware on 2018, met with different conditions.

So it would be something retroactive, like a bonus. Bonus payments usually are retroactive rather than a compensation plan. So that's a plan B. That is something that could be triggered by two events in my view. I'm only speculating and I don't know the legal basis of that. One could be the board proposing it and the other one could be Elon suing the board.

to make it possible. I mean, obviously not in a hostile manner, but it could be that may be the stronger case.

of Elon suing the board and then the board has to come up with a solution, right? So that could be a plan B. The plan C could be, well, we just dropped that for the moment. And I think at that point, probably they will not go into appeal in Delaware for the current case, for the Tornetta case, because it would be, it would be,

very difficult to overcome a negative shareholder vote in an appeal, right? We would go to the Supreme Court in Delaware with a negative judgment of the head of the Chancery Court, which is always difficult to overcome because you know how jurisdictions work. They don't like to

you know, counter the lower courts and chance record is not a really lower court. And the other point is that if the shareholders don't have it, we don't have the argument saying, look, shareholders still want this. So we just drop all that and we focalize completely on taxes. And then the new 2025, because I doubt it would be in 2024, compensation package has higher incentives that

you know, help the sort of compensate for what's been lost in the five years between 2018 and 2023. Got it. And yeah, if Texas vote doesn't go through, then they would have to be in Delaware, the compensation plan. Exactly. That's why I say it's so much more important. Texas is the most important here. Again, it's...

I don't expect Texas to pass. I expect the compensation package to pass, but Texas has to pass at one moment so that we leave this whole scenario out of it.

Very interesting stuff. So let's say a shareholder right now is having problems voting. Who knows? Maybe they're in a different country or something, or they haven't voted, they haven't been contacted, or whatever situation. I know you've helped many Tesla shareholders find a way to vote. How can people reach out to you to get help? I know one of the first ways might be to view your pinned tweet. You have some resources there, I believe. But what are some other ways that they could reach out to you?

So the first thing is if somebody has, you know, just needs current information on whether it's possible with their bank to vote or not, the easiest is on X, go into search function and put in the search function hashtag voted Tesla 24, V-O-T-E-D Tesla 24.

and then in the name of the bank, let's say Vanguard. And by doing that in the search function, you find all the posts that have been done over Vanguard. So it could be that somebody else not related to me says, oh, I could vote for Vanguard. I did this and that, whatever. But they'll find 20, 30 posts that are to that matter. Or if somebody is in a certain country, let's say in Austria,

#votedTesla24Austria will find all the posts that have been done on that subject for Austria. So that's the easiest way to quickly get to where the current status of information is for a certain country, certain broker. The second is that people reach out to me and they can do so publicly or by DM. And I mean, people have found my email, I found my phone number, it's crazy.

It's coming from all sides on Facebook or LinkedIn, whatever you want to do it. So, and I don't mind. I think this is really a worthy cause to help as much as we can. The issue is for international voters, time is really running out because most of those international brokers

have still manual reconciliation of whatever has been voted, have to then submit it here in the United States. So they need a couple of days and we're running out of that time. For the US and Canadian investors or people that have their bank accounts in the US, in Canada, they can vote up to the 12th of June. And anybody that has, for US banks and brokers who has not received anything from their US banks and brokers, it's very easy. Contact them.

them. They have to give you control numbers, one control number per account where you have Tesla shares. So if you have an IRA and a brokerage account or whatever, you will have multiple control numbers and then go on proxyvote.com, put in your control number. You should see the numbers of your shares that you had on April 15th, and then you can vote there. Very easy, three minute operation.

Yeah. I think voting for shareholder issues, sometimes it's like going to the dentist. It's like you're dreading the big operation or something. But when you do it, actually, it just takes a minute of time. You just click a few buttons and you're done. I'll go ahead and link your ex-profile on this video description so people can find out more information. Alexandra, tell me why personally

Are these issues important to you? Like, why did you vote the way you voted? What does it mean to you? You know, like from your own personal kind of decision making, you know, thinking right there. Yeah. Well, I'm,

You know, I consider Tesla is my company. I mean, obviously not only mine, you co-own it a little bit as well, probably a little bit more than me, but it is really very personal to me. I became a Tesla shareholder in March 2020 after sitting for the first time in a Tesla. We had electric cars for six years, so I was used to electric cars. I was used to the torque, but I was not used to driving a computer, right? And so I came home that, I remember very well, it was Tuesday afternoon and

the next morning, sold any and everything we had in liquidity or in index funds or whatever, and poured it all into Tesla. And since then, every money I had went into Tesla. So we still have our vineyard, we still have our hard assets, but we don't have any other investment in anything else in Tesla. That doesn't mean that I'm blind. I'm analyzing this company

I'm absolutely passionate about it. I think this is a company that's going to change the future of us, but for sure of our children. And I want to make sure this company is run in a way that is

continuing to change the world. I don't want it to become something, you know, what Apple is now or whatever. I want something really dynamic, aggressive, with motivated change the world. And that means having Elon on board. I'm not saying Elon is easy every day. I mean, I'm not his mother and I know how Mai feels about when every morning she opens X, but it's not, you know, he is controversial.

But it doesn't matter to me because he is the best person to run Tesla the way Tesla is run. I also agree with the board. I've studied the board a lot because initially people were telling me, oh, this board is doing nothing. You've got to be kidding. This board is really good. And they're doing, it's a very large spectrum of people with lots of different abilities, connections in the world and experiences. So I'm...

After all I did, I had actually, I remember end of 2022 when the stock came down, one of my coming to Jesus moments because, you know, got close to $100. And I thought, you know, you're really at your age, I'm now 58, want to continue being in a stock where you have this sort of volatility rather than, you know, having something a little bit more relaxed. And sleepless night, and that morning I woke up and I said, this is it.

I'm in it for the long term. I have another five to 10 years. I don't need any of this money very soon, probably more than 10 years actually. And then once you have that commitment, it's a little bit like if you have a family member, you have a child, you have a partner, you're in it. That's it. There may be good days and less good days, but it was what it was. And from that moment on, I wanted to make sure that I bring to the table what I know. I mean, I don't know a lot, but I know rating agencies quite well. I know governance probably better than most.

And I'm one of those people that if a job needs to be done, I don't mind getting it done. Right. And so in those moments, I step up and do what I can. And other than that, I'm just happy to be a retail investor. Yeah, definitely. Interesting. Interesting. So let's talk about I want to get your feedback on this issue of Elon Musk at the

at the helm. I am in 100% agreement. I think Elon is the person that needs to lead Tesla, especially if you want a Tesla that aggressively goes for the future, doesn't hold back. There are definitely some flaws and weaknesses Elon has. He's not the perfect human being, obviously, but what he brings to the table, it's I think what Tesla needs for the future. Exactly.

Recently, though, a few months ago, Elon brought up this issue of like, "Hey, I might need 25% of voting power in order for me to go all in with AI and Tesla."

why why what's the background you think of that? Like, why does he need that? And then more practically speaking, like, how does he achieve that? Like, what are the options? Are there any realistic options to get 25% over time? There are and the key word is Texas again, right? Not in Delaware, for sure. But in Texas, yes. So I completely agree with you. I mean, he is

at the helm for a good reason. And Tesla is what Tesla is for good reason. I mean, this morning we had SpaceX making wonders again. I mean, every day there is a new

challenge that Elon took on. And we're marveling because it's just, you know, it's working, it may be late, it may be different than we initially thought, but it's always marvelous. So I, and it comes with a lot of pain, right? It comes with pain in the stock price, it comes with pain when he says things that I would have said, or I wouldn't like my children to hear. But it's, it's nothing compared to what he brings to the table, right? And I still believe he is

profoundly motivated by something good. And there are a few people in the world where I give them that credit. Most people I'm like, yeah, you're after money or you're after power or whatever. I don't think Elon is motivated neither by money nor by power, but the 25% voting rights, we're getting to that in a second, have a real importance. So the first one is, I think this current vote actually shows how fragile the majority in Tesla is. There are lots of people that have

political ambitions or that are just stock price driven. And Elon is not. Elon has always told us if you're not here for long term, if you're gambling with margin and options, don't be in the stock. If you think you're buying an automaker, don't be in the stock because that's not what it is. It's actually a startup. It's a huge startup, but it's

collection of many startups, but it's certainly nothing established and nothing where you can hope for dividends in the short run, nothing where buybacks will become quickly a topic just because it would help the share price. It's not managed that way. It's managed like a startup. And that's a good thing. So if you can understand that, but you also realize by being a public company and

and one of the most traded stocks in the world, right? Tesla is consistently one of the most traded stocks on the stock exchange. So when you have a situation where

Lots of option traders out there, lots of index funds out there, lots of these people don't have humanity in their in their books. Right. And they don't have, oh, I want to I don't care about the stock price, but I want to make sure that in 10 years, you know, this this was a good investment. That's not how they think. So you're suddenly stuck with a base and

an investor base and lucky, like I said, we still have a lot of retail, but retail needs to be able to vote where you could have bad influences. And in financial markets that come from them, and I've seen them between 1990, yeah, 1992 and 2007, that was my 15 years in the financial markets.

they can be very sheepish. When you suddenly have somebody telling everybody you have to vote against it, you can have a lot of sheep just walking that way without thinking a lot about it. So the risk of Elon being outed

or the board being outed or whatever, comes with a 50% plus one vote, right? And a 50% plus one vote, when you have a lot of institutions and when you have a lot of brokers and whatever in that basket, is very difficult to perceive. I always try to explain to people on X, we knew on April 29th

that the date of record for this vote is April 15th, right? So, you know, 15 days later. I was expecting this whole shareholder meeting to take place six weeks earlier because there are actually rules on last year it was that date. So this year it has to be at least this and that date. So, and suddenly we were out of these normal rules and I was wondering why, and obviously now we understood it because they wanted to get the Texas vote in and all those things. So it took more time. But if you are clever,

and Tesla is very clever in not showing their cards. If you're a clever institutional investor, you can actually build up a position just for the date of record, right? If you want to have voting power and you know the rules, how from one year to the other, there are certain dates that have to be respected,

You know that next year on the 15th of April, if you have a huge chunk of votes, you will have a lot of voting power, even though then maybe on April 16th, you don't have the votes anymore, right? You can sell everything the next day. So with this in mind, if Elon would stay at the current 13%, so the current situation is 13% he has.

But 7 to 8% is this current compensation package. So that would bring him to 2021. But obviously it's not voted yet and it's not ratified yet. If he stays at 13%, that's not a lot of influence. And with AI being such a sensitive topic where I think bad actors have suddenly a leverage like we've never known before.

of the influence of how you can use bots, how you can use large language models, how you can use images and the way they are now pretending to be reality yet have nothing in reality, how you can do all that, bad actors could take Tesla over. And I think that for him is a much bigger concern than any money or any power in a traditional sense. I don't think he has any of those.

And with 25%, why would that make it more stable? Well, because if you still have the 40% retail investors and if we manage to finally get everybody to be able to vote and be aware of what's happening, that gives you the majority you need. And that's why Tesla wants retail investors. I'm having this discussion all the time. I did yesterday on the phone again, where small retail investors count as much as large retail investors. We need to be a solid base because more

more people we are, less fluctuation is in that number of voting power. Okay, so what are the options going forward to get that 25%? So let's

let's say the 2018 compensation plan gets ratified, it gets pushed through. I know he has to probably sell almost half for taxes. Does that still get him a 6% boost? It's not half, but after tax, he probably will be between 19 and 20%. The good thing about that is that he has to hold those shares. Those were shares, the 2018 package made it very clear he has to hold them until 2028 at least.

So that gives him that package. And then there should be another 5%, right? 5, 6%. Now in Texas, you could now have what lots of other companies have is meaning shares that have more voting power than others. And I think that is the way they want to go.

Again, they have been in this proxy very clear that they're not working on anything once, you know, until they are re-domesticated. It says it 10 times. Is that true? I have no idea, but it says it 10 times. So they're making sure that new compensation plan, different types of classes of shares, all that is pushed out until we're in Texas. So that nobody can say, well, it was discussed now that was still Delaware, right? No, no, no. It's until we're in Delaware, we're not talking about that.

Got it. So I'm guessing a new compensation plan by Elon Musk going forward could be a mix of financial but also maybe extra voting power with extra different type of shares, and especially if the Texas vote comes through, right?

Yes. And actually the voting shares allocation is something, if I read it right, again, not a lawyer, so may want to have to scrutiny of a lawyer over that. But in what we're voting, if we're getting to Texas, I think we also approve straight away that the board has the power to issue these other shares for Elon without having to go through another vote. Interesting. That'd be cool. All right.

One other thing I wanted to ask you about, which is about the current case in Delaware. Recently, I read about Amy, I think, SF Tahoe, Amy Stevens, talking about being able to appear in court and having a team of lawyers, I think, hired on contingency, right? Could you explain kind of what this whole situation is?

Yes. So, Amy, the last two months with Kristin and Amy and me, we were discussing two months ago what to do, right? We initiated the call to action for those letters to be sent to the lawyers.

And then Amy said she wants to take up litigation. We discussed whether we should appear all three or whether it was a better idea by herself. And we decided that it was better she looked after that. And from there on, she ran with the story and has done an incredible job. She has reached out to the Stanford Law professor she wanted on the case.

And he immediately took the case. He immediately said, yes, there's wrongdoing. I want to help. And he is the key person in this field. And he then found the lawyers that he wanted to work with. And I mean, extremely, extremely qualified team, all working only on contingency. So maybe some people don't understand what that means. They get not paid anything.

if they don't win, right? So there is no cost for the Tesla investor as long as they don't win. And if there will be a cost, well, it will be because we're not gonna pay 6 billion to the plaintiff's attorney. So their fees will be a little fraction of that. So there will be a huge gain for Tesla's shareholders.

So she reached out to them and they've been working very diligently on this case. The whole reasoning of their argument is the fees

requested by the attorneys from the plaintiff are just outrageous. And they are outrageous for a couple of reasons. There is a precedent called Sugarland, which is a very relevant precedent for this case. I'm sorry, talking so much legalese, which clearly states that they cannot just take the current Tesla share price and say, we now want, I think it's 29 million shares, that's it.

But if really they deserve anything and that is yet to be proven, it would have to be based on the 2.3 billion that that package was worth in 2018, not the 50 billion it is worth now. So we're already dividing by 25 their assumptions, right? There are a couple of other very clear arguments they've made. It reads really easily. It's a very, very well-written plenary for her case.

And so the big question was whether the Delaware court would accept to now include this because you have to understand where we are. End of January, beginning of February, the judge comes out with a preliminary judgment. Then the, I mean, everybody freaks out. Then the next action was that plaintiff's attorney brought forward his claim of 6 billion to be paid.

Then we called for a shareholder meeting end of April, Tesla shareholder meeting, where suddenly this all became less comfortable for the lawyer and Tesla asked

for some extra time to now have the response to the plaintiff's attorney's requests. They're going to file something in the next couple of days. Then we'll have to shareholder vote. Then there will be beginning of July, the final judgment. There may be a hearing still in there and whatever. But this is all going to happen in the next six to eight weeks now. And then we'll have a final judgment. And then if Tesla wants in the 30 days, they can appeal.

Okay. Got it. All right. So Amy's case, is that joining, I guess, the current case? Yes. It is in there now. That's exactly it. Yes. Okay. Got it. And that was time critical because we're getting close to the end.

Yeah, yeah, a lot of stuff going on. Alexander, thank you for giving us a deep dive into all things for Tesla shareholders at this upcoming shareholder meeting. It's going to be an important one, I think, with a lot at stake. Any kind of, are you going to be there personally? Are you going to

I will be and I was very lucky first row Jeff got drawn and he invited me as his plus one and then two or three days later the second draw I got my own invitation. So now I'm double-decked and so I will be there, yes. Okay, great. It'll be fun to meet you. You too, right?

Yeah. Okay. All right. For those who are interested in following up, if you haven't voted, you can go ahead. Just follow the instructions. Your broker should have emailed you or sent you something. If not, go log in, ask them. Again, you just need a control number. Go to proxyvoting.com. And it's super easy, super simple. If you're having problems overseas in a different country, the hashtag is #proxyvoting.

voted Tesla24 and type in your country. And if not, if you can't find anything, go ahead and reach out to Tesla Boomer Mama. I'll go ahead and link her X profile. All right. There we are. Thank you very much, Dave. Okay, great. Have a great weekend. We'll see you later. Thank you. Okay.