Good morning. Andrew here. Elon Musk won a Tesla shareholder vote yesterday to be paid up to $1 trillion, and did so in the same week that New York City voters elected as mayor a democratic socialist who believes billionaires shouldn’t exist. That divide is meaningful and should probably spur some reflection — not necessarily about which side is right, but about what that divide means and what might be needed to bridge it. Think about that this weekend and please email us with your best ideas. Also this morning: We take a look at why C.E.O.s aren’t going to the U.N. climate summit known as COP30 and at the policy highlights of Representative Nancy Pelosi’s career. Plus: A.I. hacks from the C.E.O. of Snowflake. (Was this newsletter forwarded to you? Sign up here.)
What now for Tesla?The last of this week’s consequential elections has concluded: Tesla shareholders approved a pay package for Elon Musk that could eventually be worth about $1 trillion. But Musk must now steer Tesla, the carmaker he leads, past a series of milestones to get the full award. And other questions are hanging over the company’s future. Tesla investors overwhelmingly approved the plan. It gained support from holders of about 75 percent of the company’s shares, including from many of Tesla’s retail shareholders. That said, big investors voted against the package, including Norway’s sovereign wealth fund and several public pension funds. Musk was elated. “What we’re about to embark upon is not merely a new chapter of the future of Tesla but a whole new book,” he told attendees at yesterday’s annual shareholder meeting. Musk’s stake in Tesla could rise to 25 percent, giving him the greater control over the company that he has publicly demanded. (Many investors worried that he’d spend less time at Tesla if the package didn’t pass.) But Musk doesn’t get the package right away. The shares will be awarded in 12 parts, and for Musk to receive them, Tesla must hit financial and operational targets. Unlocking the first chunk alone requires that Tesla’s market value rise to $2 trillion and that the company do one of the following:
Ultimately, Tesla has to reach $8.5 trillion in market value and all the operational goals for Musk to earn the full compensation award. Some context: Tesla’s current market value is $1.4 trillion. The company has delivered about 8.5 million vehicles to date. Its robotaxi program is currently being tested in just two cities, with a few dozen cars. Its Optimus robots aren’t for sale yet. (The Wall Street Journal has helpful graphics illustrating how far Tesla has to go to meet some of those aims.) That said, some critics have said that the pay plan gives Tesla directors too much leeway to award Musk stock even if the company doesn’t achieve the product goals. The Tesla board appears undecided about something else Musk favors: investing in xAI, his artificial intelligence start-up. While a shareholder proposal in support of such a move received more yes votes than no ones, there were many abstentions. Tesla said its board would decide on its next steps. Robyn Denholm, Tesla’s chair, has questioned the logic of deepening ties between the two: “The strategies of the two companies are fundamentally different, and I think the problem is that both have the letters A.I.,” she previously told The Journal. But Musk outlined some ways Tesla might invest in its own A.I. capabilities, including by negotiating with Intel to manufacture chips for the company.
Airlines prepare to cancel hundreds of flights. After the Trump administration announced a shutdown-related reduction in flights at 40 major airports, American, Delta and United said they were cutting traffic on some routes. Experts warned of a bigger hit if the federal limits on flying remained around Thanksgiving. An end to the shutdown appears elusive, as Democrats seem unlikely to agree to the latest Republican overture. The job market is still weakening, probably. The shutdown has put official labor statistics on ice, including a monthly job report that would have been published today. But alternative data sources collectively suggest the nation remains in a “low-hire, low-fire” limbo. That said, some economists worry that a surge in layoff announcements may lead to a sudden spike in unemployment. President Trump reaches a deal to expand access to obesity drugs. Trump and executives of Eli Lilly and Novo Nordisk announced a plan to let Americans buy GLP-1 weight-loss treatments directly from manufacturers for an average of $350 a month; when pill versions become available, they could cost as little as $149 a month. In other pharmaceutical news, both Pfizer and Novo Nordisk raised their bids for the obesity drug developer Metsera.
Pelosi’s recordRepresentative Nancy Pelosi’s retirement announcement yesterday shook the political world. She was a driving force in passing legislation that transformed the business of Wall Street and corporate America during her eight years as speaker. DealBook looks back on three pivotal moments in her career. Troubled Asset Relief Plan: In September 2008, George W. Bush and Treasury Secretary Hank Paulson’s $700 billion Wall Street bailout package teetered on the edge of failure. Republicans were dead set against the plan to let the government buy distressed mortgage assets from ailing financial firms. Paulson turned to Pelosi, pleading with her on bended knee to save the plan. She persuaded House Democrats to pass the bill, despite their fears over risking taxpayer money to help Wall Street tycoons. Markets rebounded and a wave of major bank failures slowed. But the bailout, which helped banks but not mortgage holders, angered many on Main Street and widened political divisions in Washington. Obamacare: A year later, Pelosi played the central role in passing the similarly divisive Affordable Care Act. She won over Democrats by, among other things, convincing House members who supported abortion rights to accept restrictions demanded by anti-abortion legislators. Pelosi later rallied House support for the Senate’s version, which she’d previously declared a “nonstarter.” Obamacare and its expansion of Medicaid cover about 44 million people today, and the threat to key provisions of the law is at the heart of the government-shutdown standoff. Inflation Reduction Act: Pelosi’s final major accomplishment as speaker was also passed along party lines. The legislation provided more than $370 billion to climate and green energy programs, set a process to reduce prescription-drug prices, extended Obamacare subsidies and increased taxes on corporations. What didn’t pass on her watch: Congress has yet to ratify legislation that would put limits on lawmakers’ trading of stock based on information they glean from the backroom legislative process. Her highly successful trades (many were done via her husband, Paul) have become the fascination of stock pickers, spurring a boom in apps and E.T.F.s that track her portfolio.
No-shows at COPThis year’s U.N. climate summit, COP30, is underway in Brazil with several notable absences. The Trump administration has not sent any top officials, even as scores of world leaders have begun meeting in the Amazonian city of Belém yesterday with climate investment topping the agenda. Corporate chiefs from American companies were also hard to spot this week at COP30’s preliminary confabs elsewhere in Brazil, Vivienne Walt reports. It’s a trend that picked up pace with the re-election of President Trump, who called climate change “the greatest con job ever perpetrated on the world,” even though there’s scientific consensus that global warming is real and caused by humans. Despite Trump’s opposition to the cause, investors are still pressuring American companies to act. And their efforts are not being ignored. Here’s what DealBook is hearing: On the whole, corporate America has not abandoned emissions targets or green investment plans. “U.S. businesses are talking less about what they’re doing but keeping up their actions in the background” so as not to raise the anger of the White House, Andrew Prag, a managing director for We Mean Business, a coalition of companies advocating climate action, told DealBook. That said, few are predicting a quick return to the days when COP gatherings became a showcase for corporate leaders to strut their green credentials. Climate is a bottom-line issue. “Investors are looking at climate change as a financial risk, with legal and reputational risks,” Arianna Griffa, a senior policy manager of the Institutional Investors Group on Climate Change, told DealBook from São Paulo this week. She added that those risks included the prospect of missing out on potentially lucrative green-tech investments. China is another factor. Its push into electric vehicles and solar power has left the West far behind, and investors fear missing out. But there’s a big financing hole. This year’s COP will again try to tackle the fierce debate about which climate projects to finance: About $1.3 trillion is needed in the next decade to fund the energy transition. “‘Is OpenAI trying to become too big to fail, and should the government pick winners and losers?’ Our answer on this is an unequivocal no.”— Sam Altman, the C.E.O. of OpenAI, in a lengthy post on X. He sought to play down perceptions that the artificial-intelligence giant was seeking a government backstop, after his C.F.O. said that federal guarantees for the financing needed to buy A.I. processors would be helpful. (She later walked back the comment.)
Talking A.I. with the head of SnowflakeEvery week, we’re asking a chief executive how he or she uses generative artificial intelligence. Sridhar Ramaswamy, who leads the data storage and analytics company Snowflake, told DealBook he wasn’t trying to add A.I. to every task at once. His answers have been condensed and edited. How do you personally use A.I.? A.I. has become my go-to tool for dealing with information, whether it’s researching a start-up I’ve heard about or a technology trend. Even for fun little projects like making probiotic yogurt. Have you given any directives to your companies or direct reports about what you want them to do with A.I.? Leaders intuitively understand that A.I. can affect a lot of things we do. Most of our jobs are just information processing. And that can lead to paralysis, because figuring out how you should change everything about how you work is just too much. Advice that I give other folks, and that I’ve applied for myself, is to have a clear view about where A.I. needs to have the most impact. So my deductive view of Snowflake, for example, is that we create software and run it on behalf of our customers. And our sales team sells software to customers and helps them deploy their data on top of Snowflake. There are many other functions, including my own, but the thing that matters is: make software, sell software. And so we take extra care to emphasize that every aspect of this core part is as efficient and progressive as possible. Living in a world where you can change everything is a little bit like, yes, your gym has every piece of equipment, but that doesn’t actually help you get fitter. I think the prioritization, the plan, is just as important as the possibility. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
Deals
Politics, policy and regulation
Best of the rest
Thanks for reading! We’ll see you tomorrow. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.
|
