What Elon Musk’s anticipated victory means for Tesla

“Beginning a new book,” Elon Musk achieved his goal

• Tesla’s shareholders approved his two major requests, allowing the business to re-incorporate in Texas and upholding a multibillion-dollar remuneration package that had been declared void by a Delaware court. “I believe we’re not merely beginning a new chapter for Tesla, we’re writing a new book,” a triumphant Musk said to the company’s shareholders at the annual meeting.

• The decision does not put a stop to Tesla and Musk’s Delaware court battles, which also concern the pay scheme. However, it is evident to investors that they and the electric carmaker’s fate are closely related to its chief executive officer.

• Musk said on Thursday that “we have the most awesome shareholder base.” On Friday, Tesla said that the compensation proposal had received 72% of the votes cast at its annual meeting—votes not held by Musk or his brother, Kimbal. With the exception of the Musks’ shares, about 84% of votes cast supported the request for reincorporation.

• According to sources close to DealBook, Tesla was able to turn out a much higher percentage of ordinary investors—who were generally in favor of Musk—than typical for the vote. However, the company’s vote totals would not have been possible without the backing of Wall Street investors like BlackRock and Vanguard.

• Wall Street believes that Tesla’s worth is dependent on Musk’s satisfaction. In order “to retain Elon’s attention and motivate him to continue to devote his time, energy, ambition and vision” to the firm, Robyn Denholm, the chair of the board, had pleaded with shareholders to adopt the plans.

• Musk’s detractors cited actions that implied he may jeopardize Tesla’s future if he didn’t get his way. Prior to the most recent salary disagreement, he acknowledged to switching Nvidia A.I. chips intended for Tesla to X and xAI and had threatened to concentrate his artificial intelligence development at his other firms if he didn’t gain more voting power. (At least one recent Delaware-filed investor case claims that Musk effectively used coercion to get shareholders to vote in his favor.)

• Additionally, Tesla will soon function under Texas corporate law, which is probably more management-friendly than Delaware’s, thanks to the reincorporation vote. It’s important to note that the state will supervise Musk’s future remuneration.

• According to Ann Lipton, a Tulane University corporate law expert, shareholders effectively expressed that “we are comfortable with less judicial oversight of how Musk manages his companies” to DealBook.

• What boundaries is Musk facing now? His choices aren’t automatically renewed just because the compensation plan was approved. It’s just one more thing Tesla can say to convince the Delaware court to allow the compensation plan to be reinstated.

• However, the vote demonstrates that investors believe Musk is the sole factor setting Tesla apart from competitors. (The automaker has an enterprise value multiple that is five times larger than General Motors’ and three times larger than Ford’s.) Concerns over Tesla’s future have caused its stock to decline recently, but the vote indicates that investors are more concerned about how much worse things may become in the absence of Musk’s undivided focus.

• One thing we would want to know is how the vote will affect the multibillion-dollar fee that the attorneys who successfully contested the Delaware pay plan are requesting. They will probably still get a sizable payout if the presiding judge rules that the package is still voidable. They could get significantly less if she changes her mind, but they would most likely file an appeal.

THIS IS WHAT IS GOING ON

• Once again, Apple is the most valuable publicly traded firm. Since the iPhone manufacturer revealed on Monday that Apple is making a major push into artificial intelligence, its stock has been surging. As a result of the most recent reorganization among the tech titans capitalizing on the artificial intelligence boom, its market value of $3.285 trillion now exceeds Microsoft’s.

• The White House appoints a candidate to lead a senior financial regulator. Following revelations of a hostile working culture at the Federal Deposit Insurance Corporation, Christy Goldsmith Romero was nominated to succeed Martin Gruenberg as head of the organization. Though the Democratic leadership supports her, it is far from guaranteed that the Senate will approve her.

• It is discovered that Justice Clarence Thomas has traveled on a billionaire’s private aircraft more often. Documents provided by the Senate Judiciary Committee on Thursday demonstrate that Thomas failed to disclose three trips he made on an aircraft owned by Harlan Crow, a prominent Republican fundraiser and co-founder of the Club for Growth, an organization that advocates for low taxes. The information supports demands for the justices of the Supreme Court to be more transparent.

• New York Gov. Kathy Hochul considers banning masks in an effort to combat antisemitism. According to Hochul, she is almost done with a pandemic-era health regulation that had loosened the previous ban on mask use in the subways in New York City. The turnaround occurred after social media users shared pictures and videos of masked anti-Israel demonstrators threatening other passengers on subway trains with antisemitic remarks.

CEOs are pitched by the president

• Business executives were presented with radically different perspectives on the state of the economy on Thursday in New York and Washington by Donald Trump and the Biden administration.

• While Treasury Secretary Janet Yellen cautioned that “supply side economics” weren’t good for workers or sustained growth, the former president pledged further tax cuts and deregulation.

• Their Desire Was a Tiny Home on a Calm Brooklyn Street. Would They Be Able to Pay for It?

• Trump promised to reduce the corporate tax rate from 21% to 20%. During a gathering of the powerful corporate lobbying group Business Roundtable in Washington, he gave remarks to a group of America’s leading chief executive officers, including Jamie Dimon of JPMorgan Chase, Tim Cook of Apple, and Doug McMillon of Walmart.

• Many in the room found what they heard to be pleasing. Trump lowered the corporation tax rate from 35 percent in 2017 to 21 percent; however, the reduction is scheduled to end in the following year. Despite the fact that stock markets are at all-time highs and company earnings have surged under Biden, many CEOs are concerned about the president’s intentions to increase taxes on corporations and the rich.

• Nevertheless, Trump provided no information (and subsequently allegedly suggested doing away of income taxes entirely).

• The proposal put out by Biden would increase the corporation tax rate to 28%. Additionally, he intends to keep the tax breaks for Americans with lower and moderate incomes while letting individuals with higher incomes than $400,000 or those with large inheritances to see a tax increase.

• Yellen prioritized the working and middle classes. She defended the robust economy and said that deregulation and tax breaks for the wealthy had not increased “growth and prosperity for many Americans” in a speech to the Economic Club of New York.

• She also mentioned the administration’s expenditures on clean technology, chips, and infrastructure.

• Additionally, Biden’s team emphasized how beneficial stability is to business. At the Business Roundtable, White House Chief of Staff Jeff Zients said that actions that President Trump has previously supported—such as mass deportations of immigrants and untargeted tariffs on Chinese imports—may contribute to inflation.

• However, a few business executives have doubts about both candidates. “We are facing the most disastrous combination of presidential candidates in the history of the United States,” one participant told The Financial Times.

A major setback for the N.L.R.B. in the Supreme Court.

• The political right has made it their goal to curtail the authority of regulatory bodies such as the Centers for Disease Control and Prevention and the Environmental Protection Agency. The movement just defeated one of the leading labor watchdogs in the country once again.

• In a case involving dismissed workers, the Supreme Court ruled with Starbucks on Thursday. This decision may have significant implications for the National Labor Relations Board. When a business is accused of unlawfully stifling labor organization, the government may find it more difficult to step in.

• Recap: In 2022, the coffee business terminated the employment of seven workers after claiming that they had let a television crew inside a closed Memphis location. The laborers contended that their termination was due to their attempts to form a union.

• The N.L.R.B. complained to the court, requesting an injunction to allow the workers to return to Starbucks. The Supreme Court reversed Starbucks’ appeal to the judge’s decision, which had been granted.

• The ruling may restrict the injunction, a potent N.L.R.B. weapon. The result of such actions is to deter employers from letting go of employees who attempt to form unions. Starbucks contended that a rather stringent test should be used by all federal courts when determining whether to award injunctions that restore workers, and the court agreed.

• This is only one of several recent instances that have called into question the N.L.R.B.’s jurisdiction. Amazon said in a court document from February that the agency was unconstitutional, following on from SpaceX and Trader Joe’s allegations.

• What comes next? Two cases that might significantly curtail the authority of executive agencies and jeopardize laws in sectors including consumer safety, healthcare, and the environment are scheduled for a Supreme Court decision.

Goldman raises a glass to itsIPO.

• One hundred thirty years after German immigrant Marcus Goldman created the company to provide loans to New York City merchants, Goldman Sachs went public in 1999.

• To celebrate the bank’s 25 years as a public corporation, a few of the bank’s top executives, both past and present, got together last night at Delmonico’s restaurant in Manhattan for steak, crab cakes, Caesar salad, and Napa Valley wine.

• There was a Goldman who was there. Among them were the three chief executive officers since the offering: Hank Paulson (1998-2006), who brought it public, Lloyd Blankfein (2006-2018), and David Solomon (2018-2019).

• John Waldron, the president and chief operating officer; John Thain, the president of Goldman Sachs who left Merrill Lynch as chief executive officer; and John Rogers, executive vice president and veteran boardroom and C.E.O. whisperer, were also there.

• The I.P.O. marked a turning point. It was the result of years of disagreement among the bank’s partners and at the time was the second-biggest IPO of an American firm. Paulson told The Financial Times last month that Goldman Sachs “needed to grow significantly to meet the needs of our corporate clients and investors—the elephant was becoming too big for the partnership tent.”

• Even yet, it has taken some getting used to running a public business; Goldman just had its first investor day in 2020.

• The festivities came to an end with the meal. The New York Stock Exchange’s closing bell was rung on Thursday by a number of Goldman officials. Solomon had an interview with Paulson at the N.Y.S.E. on the I.P.O. and its growth in China.