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We’ve finally learned the result of a controversial, long-awaited vote that’s generated reams of punditry and put Wall Street on edge. No, I’m not talking about the mayoral election in New York City—I’m talking about the Tesla shareholder vote on Elon Musk’s gigantic compensation package.
Musk won with over 75% of the vote, Tesla said at its annual meeting at the company’s Gigafactory in Texas on Thursday. The package will award him up to $1 trillion worth of additional Tesla shares over the next decade if he’s able to meet a host of sky-high targets. Shareholders also supported the idea of Tesla investing in Musk’s xAI, the company said, although there was a “significant number” of shareholders who abstained from voting on the issue. That clouds the question of how much support the proposal has. The board will consider what to do next, the company said.
Musk’s victory in the pay vote wasn’t completely assured—big shareholders including Norway’s sovereign wealth fund and CalPERS voted against it—but the runaway margin suggests Tesla board chair Robyn Denholm won over a decent chunk of institutional investors by arguing that Musk might step down if the deal didn’t get approved. Another reason Musk was able to run up the score: Unlike in previous pay votes, he was allowed to vote his 15% stake on the proposal, according to Tesla's proxy. That wouldn’t have been allowed in Delaware, where Tesla was previously incorporated, but it is allowed in Texas, where the company moved its corporate domicile last year.
It has to be said the idea that Musk would’ve actually left Tesla if the pay package had been voted down seems absurd. His stake in the company is a huge chunk of his overall wealth, and Tesla’s stock would almost surely tank if he stepped away, given his base of superfan investors. Why would Musk deliberately slash his own net worth?
But backers of his compensation deal have rightly pointed out that the pay package is only worth something if Tesla meets enormously ambitious targets, including vastly increasing its company’s market capitalization and profits, as well as product goals like deploying a million Optimus robots.
After the vote was announced, a jubilant Musk took the stage, where he delivered an almost megachurch pastor–style sermon, claiming that Optimus will eventually provide medical care, fight crime and end poverty. That would certainly help with sales!
Sarah Friar in the Spotlight
OpenAI Chief Financial Officer Sarah Friar has been a senior executive in Silicon Valley for more than a decade, working as CFO of Jack Dorsey’s Square and CEO of Nextdoor before landing at the ChatGPT creator. She’s likely never before had as much attention as in the past 24 hours.
Friar’s comment, at a Wall Street Journal event on Wednesday, suggesting that OpenAI was looking for a government “backstop” to help it raise financing, drew stern words from White House AI czar David Sacks (“There will be no federal bailout of AI”). Friar later clarified her comments, saying OpenAI wasn’t seeking a government backstop but simply believed the government had a part to play in “building real industrial capacity” to develop “American strength in technology.”
The brouhaha puts an intense spotlight on Friar. Despite a mixed record in her past roles, she is now occupying what has to be one of the most important CFO positions in corporate America, given the massive amount of money OpenAI needs to raise to meet its various commitments for cloud computing capacity and chip purchases.
It’s worth briefly reviewing her corporate job history. After a stint as a senior finance executive at Salesforce, Friar became CFO of Square (now known as Block) in 2012, a role she held until 2018. As my colleague Cory Weinberg recounted in this profile of Friar, she succeeded in getting Singapore’s sovereign wealth fund to put money into the company before it went public, which was seen as a coup at the time. Her role at Square broadened over time, particularly as Dorsey took the CEO role at Twitter, which meant he was running two companies at the same time. In 2018, she became CEO of Nextdoor, a neighborhood social media firm.
But her stint there wasn’t a big success. Under her watch, the company’s growth slowed. In February 2024, we reported that the board was considering replacing her. Shortly afterward, she left, and a few months later she joined OpenAI.—Martin Peers
Zaslav’s Poor Vision
Warner Bros. Discovery CEO David Zaslav opened the company’s earnings call on Thursday by declaring that the third-quarter earnings results showed WBD is “back, global and stronger than ever.” That’s a little like a parent praising a child’s disastrous performance in a local play.
WBD’s revenues fell 6% in the quarter while its earnings—excluding interest, taxes and other accounting items—rose 2%. If that’s “stronger than ever” to Zaslav, you can understand why outsiders think WBD would be better off getting sold. The Ellison family’s Paramount Skydance has made several unsuccessful takeover bids for WBD, prompting the company to put itself on the market.
To be fair, Zaslav’s enthusiasm could be understood if you focused on WBD’s jewel asset, its film and television studio. Thanks to the popularity of its latest “Superman” film and some hit horror movies, the studio’s revenue rose 24% in the quarter while profits more than doubled. But the all-important streaming segment showed no revenue growth, while the TV channel segment—which generates most of the company’s profits—shrank. Perhaps Zaslav could use a new vision prescription to help him read more clearly.—Martin Peers
In Other News
• SpaceX is buying another $2.6 billion worth of wireless spectrum licenses from telecommunications firm EchoStar, building on a separate $17 billion deal announced in September. The purchase will help the Elon Musk–led company accelerate its efforts to offer service directly to mobile phones from its satellites in space.
• Meta Platforms internally projected that 10% of its revenue last year, or $16 billion, came from ads promoting fraudulent products or schemes, Reuters reported. These include ads for fake products, sextortion schemes or crypto scams.
• Soumith Chintala, who co-created Meta’s open-source machine-learning library, PyTorch, is leaving the company, according to three people with direct knowledge of the matter.
• Brian Benedict, former sales chief at AI startup Hugging Face, is co-founding a new consulting firm, Eliza, that aims to help large companies get practical value from OpenAI’s ChatGPT and other AI services.
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