Introduction: Tesla must climb ‘Mount Everest’ to win shareholder vote, chair warns
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Tesla faces a climb up “Mount Everest” as it tries to persuade shareholders to appprove a relocation to Texas and sign off – again – a $56bn pay deal for Elon Musk, according to the electric car company’s chair.
Robyn Denholm, chair of Tesla’s board, is battling to win over shareholders ahead of an annual meeting next month.
Denholm told the Financial Times:
“We’re very early days of the campaign and we will be meeting with [shareholders] all the way through to the day of the vote.
The vote’s pretty important for us as a company, but I also think it’s important for corporate America as well.”
The controversial pay deal has already been backed once by shareholders, back in 2018, but was vetoed by a Delaware judge in January.
But Tesla is refusing to let the matter lie, and has decided to put it to investors again – and also approve a decision to move the company’s state of incorporation from Delaware to Texas.
The pay vote is a simple majority, but to shift the incorporation requires a majority of all shares outstanding.
That’s why Denholm sees a struggle; she says:
“It’s like Mount Everest. It’s a huge hill to climb because getting 50 per cent of the shareholders to vote, let alone what they vote for, is quite tough.”
The package grants stock option awards allowing Musk to buy Tesla stock at heavily discounted prices as escalating financial and operational goals are met. He must hold the acquired stock for five years.
Denholm insists that every shareholder that she’s spoken to felt the pay deal worked, and “drove a lot of shareholder value.”
This year has been tougher for Tesla, though. Shares are down 30% so far this year, it reported a 48% drop in profits in the last quarter, and Musk has fired almost all of Tesla’s electric-vehicle charging division.
The agenda
-
9am BST: Bank of England policymaker Catherine Mann speech on ‘cost of capital: measurement and implications for business investment”
-
10am BST: Eurozone inflation report for April
-
3pm BST: Conference Board leading economic index on the US economy
-
5pm BST: Russia’s GDP for Q1 2024
Key events
British billionaire total shrinks
Britain is losing billionaires.
This year’s Sunday Times rich list found there are 165 billionaires this year, down from 171 last year and a peak of 177 in 2022. This is the biggest drop since the list started being compiled 36 years ago, and shows – according to the ST – that the super-rich are. falling out of love with the UK.
They cite some example:
The tech entrepreneur Johnny Boufarhat has relocated to Switzerland. John Grayken, a Boston-born private equity tycoon, has quit London for Ireland. Telis Mistakidis, who built his fortune at the mining giant Glencore, has returned to Greece.
The Norwegian shipping heir Trond Mohn and Nathan Kirsh, the South African owner of the City block once known as the NatWest Tower, have left the Rich List for the same reason.
Yelena Baturina, once Russia’s wealthiest woman and who made her home in London, now lives in Austria.
This exodus could accelerate if the Labour Party win the next election and clamp down on the non-dom system, which allows the wealthy to avoid paying tax here on earnings abroad.
Chemicals billionaire Sir Jim Ratcliffe’s wealth shrank by over £6bn last year, according to this year’s rich list.
That’s due to a 40% tumble in profits at Ineos, the energy giant which Ratcliffe build up, and which suffered from the jump in energy costs, plus inflation and higher interest rates.
Ratcliffe’s wealth is this year estimated at £23.5bn, down from £29.7bn a year ago.
Brexit-backing billionaire inventor Sir James Dyson also became poorer (although these things are relative….), with his estimated wealth dropping to £20.8bn from £23bn, despite his Dyson company continuing to produce new hair styling and cleaning products.
Hinduja family top the rich list again
The Hinduja family, led by Gopi Hinduja, retain their place at the top of the rich list this year.
The Hinduja’s wealth rose by almost £2.2bn last year to £37.196bn, from a property-to-industrial conglomerate, which also covers energy and finance, from London.
They recently transformed the Old War Office building in Whitehall into a Raffles hotel with 120 rooms, 11 restaurants and 85 serviced flats.
In second place, with £29.246bn, is Sir Leonard Blavatnik. His investment group Access Industries holds a majority stake in Warner Music. Its value has jumped this year, lifting Blavatnik from third place a year ago.
That bronze medal slot is now occupied by David and Simon Reuben and family, with £24.977bn. The Reubens are property tycoons, having first made a fortune in metals trading – purchasing Russian aluminium before buying up large tracts of London’s landmark buildings.
Denholm: Musk is ‘absolutely’ committed to Tesla
Tesla chair Robyn Denholm was also asked what Musk might do if he loses the upcoming vote on his $56bn pay deal.
Denholm says:
“There is always a risk, but he’s not holding a gun to anybody’s head . . . He hasn’t said one way or another quite frankly. And do I believe he’s committed to Tesla? Absolutely.”
Rishi Sunak and Akshata Murty rise up Rich List
Prime minister Rishi Sunak and his wife Akshata Murty have climbed up the list of the UK’s richest people, after their combined fortune rose by over £120m last year.
The latest Sunday Times Rich List, just released, shows that Sunak and Murty are now worth £651m, up from £529m in 2023.
That places them in 245th place on the List, up from 275th last year.
Once again, Murty’s stake in Indian tech company Infosys provided the bulk of their fortune – over the last year, it has risen by £108.8m to nearly £590m.
In contrast, Sunak’s tax details released in February showed that he had earned around £2.2m last year.
But despite this jump in wealth, the couple are poorer than in 2022, when they burst onto the Rich List with around £730m.
The Sunday Times helpfully runs through the couple’s assets:
The couple’s main London home is a five-bedroom Kensington mews house worth an estimated £7 million. Soon after the row over Murty’s tax status erupted, the family moved out of Downing Street and back into their west London home.
They also own a flat on Old Brompton Road in Kensington, usually used for hosting friends and family, and a Georgian manor house in the North Yorkshire village of Kirby Sigston, bought to serve as a constituency home in 2015 for £1.5 million. Estate agents estimate that additions including a gym, yoga studio, hot tub, tennis court and 12m x 5m indoor swimming pool have pushed the property’s value beyond £2 million. Then there is their £5.5 million penthouse in Santa Monica, California, bought from its developer in 2014.
🔺 REVEALED: The Sunday Times Rich List 2024
It features the King, the prime minister, inventors and industrialists, as well as some exciting new names, but what does the record fall in the number of billionaires mean for Britain? ⬇️— The Times and The Sunday Times (@thetimes) May 17, 2024
Introduction: Tesla must climb ‘Mount Everest’ to win shareholder vote, chair warns
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Tesla faces a climb up “Mount Everest” as it tries to persuade shareholders to appprove a relocation to Texas and sign off – again – a $56bn pay deal for Elon Musk, according to the electric car company’s chair.
Robyn Denholm, chair of Tesla’s board, is battling to win over shareholders ahead of an annual meeting next month.
Denholm told the Financial Times:
“We’re very early days of the campaign and we will be meeting with [shareholders] all the way through to the day of the vote.
The vote’s pretty important for us as a company, but I also think it’s important for corporate America as well.”
The controversial pay deal has already been backed once by shareholders, back in 2018, but was vetoed by a Delaware judge in January.
But Tesla is refusing to let the matter lie, and has decided to put it to investors again – and also approve a decision to move the company’s state of incorporation from Delaware to Texas.
The pay vote is a simple majority, but to shift the incorporation requires a majority of all shares outstanding.
That’s why Denholm sees a struggle; she says:
“It’s like Mount Everest. It’s a huge hill to climb because getting 50 per cent of the shareholders to vote, let alone what they vote for, is quite tough.”
The package grants stock option awards allowing Musk to buy Tesla stock at heavily discounted prices as escalating financial and operational goals are met. He must hold the acquired stock for five years.
Denholm insists that every shareholder that she’s spoken to felt the pay deal worked, and “drove a lot of shareholder value.”
This year has been tougher for Tesla, though. Shares are down 30% so far this year, it reported a 48% drop in profits in the last quarter, and Musk has fired almost all of Tesla’s electric-vehicle charging division.
The agenda
-
9am BST: Bank of England policymaker Catherine Mann speech on ‘cost of capital: measurement and implications for business investment”
-
10am BST: Eurozone inflation report for April
-
3pm BST: Conference Board leading economic index on the US economy
-
5pm BST: Russia’s GDP for Q1 2024
